I regret the way I left my startup, but at the time I was under an abominable amount of pressure outside work, and I just sort of shot out sideways, like a watermelon seed being squeezed between thumb and forefinger. I do not regret leaving Apple to do the startup, not in the least.
You don't have to be single and childless to do a startup successfully, but if you have family life or interpersonal relationships, they have to be good ones, or at least low stress ones.
When people say stress they usually mean distress and zero of that is ideal. 'One at a time' for a period of time can be enough to topple you and the life you have for a long time or forever.
Having raised, you are under no obligation to do what your angels want you to do -- at the size we were, we spent a totally disproportionate amount of time sucking up to the Angels rather than just getting on with it.
Don't pivot to something that nobody wants to work on, simply because the investors want you to.
If you're in business with a friend, make sure you both have comparable skin in the game -- I could float off because I hadn't relocated my family from a different continent. And I lost a friend because of the way I behaved -- much, much worse than losing investor cash.
Don't be pie in the sky flakes about which color your M5 is going to be.
I've had ~10 opportunities presented to me since announcing we'd failed. They ranged from dev position through to CTO position, but ultimately I sent an email to CloudFlare and have joined their team.
A startup failing is traumatic. Aside from the emotional trauma it may lead you to doubt your own competency. I shine at product dev, and coding for that, so sought a place to do that. To regain confidence in myself.
I also wanted regular(ish) hours and salary, to build able to rebuild some stability. I'm getting married in a month's time and most of the cost of that will be on credit card (founding a startup empties your coffers). So it was important for me to be earning and giving our marriage a good start.
I may, in a few years, find that I want to return to the fray. But for the foreseeable future I feel deeply happy that I've joined a great team working on some hard problems, and that for myself I get stability out of it.
A startup is a ship at sea in a storm, I wanted to experience a boat in harbour for a while.
But in essence, we figured that out quite late... moving from helping to assist building a community to having created an import tool and to push our numbers harder by simply moving existing forums/communities to us.
We hit the end of the runway before the impact of that was felt. We didn't manage to raise enough funds to continue.
We've open-sourced everything now, and I'm helping a couple of customers set up their own instances. Most customers are staying on a single shared instance though, as one of the larger sites is able to cover all of the costs of this (via the affiliate fee structure we had built in).
It's a hard thing, to fail in such a way. We had 44,000 users, 280+ forums, and some revenue. But the revenue was significantly lower than costs (when you have employees, founders, etc), so the crunch hit us.
I hope that the platform continues to live, and that it continues to shine. The customers are really happy, and some of the sales effort is still paying off (I spoke to a customer 3 days ago, who have 4k users, and they are joining the LFGSS.com instance of the platform).
It would be easier if we had failed more spectacularly, more obviously. Perhaps by just not getting any users at all.
(I'm writing all this because I really liked what you've been doing and I still think it's a viable idea ... that you just happen to have overdone a bit).
We knew it too. But that wasn't the reason for our failure. Our sales pipeline was already quite full and so our focus wasn't on changing the pitch even though it was sub-optimal.
Instead we were trying to optimise the slow sales and onboarding processes as those were what held us back at that point.
It's the usual thing: We had limited resources, and so we prioritised based on what would achieve the most at the time. Even though our pitch was bad we didn't have a problem with populating our pipeline, we had a problem converting due to slow committee-based decision making and then onboarding an existing customised/bespoke forum.
"It feels very much like we would be creating an enormous amount of extreme risk (the foolish kind)"
I'm puzzled what the risk was, unless you would still be losing money even with no wage costs?
The risk therefore was to the investors, whose support we needed to continue even though we hadn't secured more experienced angel or VC support (not a good signal).
Despite doing every single conceivable thing wrong, we lasted a few years before dramatic failure ultimately hit. I learned the insidious thing about initial (modest) success is you become conditioned to underestimate the scope and probability of failure that can topple you in the future.
One of my cofounders, who had always hated the startup part of our endeavor, and who wanted us to become a respectable German company as soon as possible, he was the first one to bail. And in hindsight he was absolutely correct about choosing the right moment to quit. It took me a few more months of pouring my own money in and taking on debt until I realized how absolutely screwed we were.
Let me tell you: failing, in Germany, with your own money and in debt... it's pretty bad. Here, culturally most of your relationships are built on a sense of success and respectability. You lose all that in an instant. Customers and business partners wouldn't even take my call when I wanted to do a last farewell chat, even though we didn't owe them any money or anything like that. The disappointment coming from my family and friends was just complete and total, though they tried to be nice about it. The failure of my company now meant that I as a person was also a failure.
After going down with the ship I went for a full time job, eventually sold a side project/company for a bit of independence, and did this for a few years, then transitioned to freelance software development.
I have to say after the startup - even considering the horrible parts towards the end - after the startup there is a bleakness to a "normal" lifestyle I could never quite shake off. Recently I've also gotten some very unpleasant nudges from life which made me realize time spent on things is irrevocably wasted if they're not important to me.
So I'm going into the fray again. In fact I'm working on a prototype right now.
I know a bunch of german companies who did everything wrong, but still operate for years.
Many of my friends worked for so called "web agencies" who build shitty typo3 pages en masse. Most of the people working there were interns.
I worked at a academic spin off. They had good tech but bad UX. They worked on for about 14 years and didn't make any money. Somehow the founders were good at raising money from investors. So the bills always got paid.
This is what our initial success was built on. We had a two-pronged approach.
First, in the homeland of typo3, we got massive mileage out of our own CMS product which could do everything that was oh so painful with the usual products in this space. We became the "can do" guys, and we could do everything so much faster and more elegantly than the competition.
Our second angle was our stealthiness: since agencies are in the business of appearing way larger and more talented than they actually are, bringing in outside contractors was a serious loss of face for them. We offered to appear as internal agency staff in all customer interactions. We would go to on-site meetings in their clothing style, even. Technical customer support calls were transparently routed to our office, to complete the illusion that everything was done in-house at the agency.
Everything else we did wrong, though. We had too many employees, some of them were bad hires to begin with, and we worked them too hard, too. You can't keep a whole team in death march mode all the time. We founders were terrible bosses, as well. I was way too friendly to the point of being taken advantage of, another founder was just generally clueless about everything, and the third one was so harsh and troubled when he patrolled through the offices it actually looked and felt like he was captain Ahab tormenting his trembling crew. Then the budgets of the agencies crumbled suddenly, and almost over night there was just no more money. The little work we got came at unworkable margins. Agencies were poaching our employees. We took on big, risky projects just to stay afloat. One of our biggest customers went bankrupt and then sued us for everything they had paid for our services in the last 12 months. And they won (still a bit unclear how that was even possible, but I found out later their CEO was personal friends with the judge).
All in all, it was one hell of a learning experience. But there were some good times as well. And the freedom to work on something you care about is just priceless.
lol, implying completing "the illusion that everything was done in-house at the agency" wasn't wrong in the first place.
Anyway, I still can't imagine why people found agencies.
If I want to do consulting, I'd become a freelancer, this pays much better and there is plenty of work.
If I don't, I would work at a real software company that builds and sells software products...
1) As a consultant you have to be constantly networking, and selling yourself, to keep the pipeline full. He hates that, being on the antisocial side.
2) As an employee at a traditional firm one works on one product in one industry, for multiple years in a row. He works on about 4 products in 4 industries a year.
3) Working for an agency he makes more than he would as an in house employee, yet has a number of employee like perks. This is largely because he's good, and has negotiated hard - but this stuff would be harder as a freelancer.
I have some hard feelings about consulting :\
"Running a company would make you perfect for any conceivable job were it not for the fact you'll never want one again."
Not sure where I read that, but it sounds true. I am being gently pushed into job life by circumstance after 5 or 6 years of independent life (startup ~2 years, school ~1 year, freelancing ~2 years) and getting hired, even just talking about the possibility of a job job, feels like losing.
But alas, freelancers do not get visas so I will just have to suck it up.
I have failed in the year 2011 after 7 long years at my bootstrapped company. My business partner didn't want me around, I was pretty emotional after so many years, I felt it's time to accept fate n move forward.
Broke up with my gf, I quit my company(gave my 67% to partner if he split debt). So I pretty much walked out with million dollars debt and nothing on hand, life was tough.
I started again,my small business was ok, my burn rate was low,I was ramen profitable ...burning $2000 per month but all customers money, hired employees fired lazy ones.
I just couldn't cope with debt sold my house, my car, my dads house , my aunts house, fortunately n unfortunately I am from india, here people threaten with dire consequences and people give all their life earnings for loved ones. So all the assests cleared about 500k usd dollars.
I earned 200k usd doing consulting, mobile apps, web apps, sentiment analysis ,paid 60k usd salaries. Now I have another 200,000 usd to clear on track to clear it but ....something beautiful happened , I married my gf after 3 years of break, my ex-business partner wants to do business with me again since he saw how I came out of rat hole,...
.I just have one thing to say "don't give up and hang in there with logic and common sense"
I feel I will succeed financially in 2015 , Our product is coming beautifully...then perhaps I can write a book...till then I have midnight oil to burn..
For my part, in 2 failed businesses I never went more than £10k or so into personal debt.
I never borrowed but from my family , but since my business partner borrowed hell lot from friends, cousins, to keep it going , we were essentially paying 24%-36% interest on the debt, almost all the profit was going to just pay interest.
And since we were
Not making operational profit , we did turn over of 5million usd , paid interest of 2 million and operationally we were in a debt trap. It was classic case of denial of risk and peril.
just thought that I will come up with blockbuster product and wipe it all,it never happened in 7 years the problems multiplied. Debtors were hounding on the door for their principal, even though we paid them huge interest,it's like bank run, once they sense things are wrong , everybody wants their money back on that day. Got into new personal guarantee agreements ,made huge sacrifices and finally here I am.
Also why would you pay US$ salary in India(assume)? There are lot of well funded small startup's that would staff augment you for US20$ an hour for decent programmer and you could have used remote college student for the programming after initial training.
Haven't done startup as thinking of doing in in our environment gives me jitters as I am not a very social person and gets really pissed of with govt officials. May the that was only way you had at the time.
One of the most important lessons , I got early on is ,you need developers and staff full time on rolls,right next to you if your business model is dynamic and also you are not sure of staff quality. If you go to skillpages, there will be thousand resumes claiming they know Python , once you hire them you will know the quality, outsourcing works to that kind student quality is like sure shot disaster.
Also I just was not lucky enough to find quality talent to outsource.
About india being good for entrepreneurs , yes and no, depends on what you are working, but just to give up on startup idea altogether is not recommended ,choose carefully plan well and most of all EXECUTE WELL.
1.Never ever give personal gaurantee for more than your net worth! So that failure stops with you, otherwise your entire family gets affected.
2.Focus on one thing , become incredibly good at it.
3.Focus on customers and trust yourself on giving value , customer insight is better than customer need.
4.Be alert about interest on debt ,business debt ( high interest) essentially will kill every possible way of being rich, instead it will drag you down the road of no return.its 100 times better to get VC fundin or investor money than business debt.VC will stop you before it's too late.
LESSON ....take business debt only from banks if it's low interest, then investor money. Ideal is do business with customer money if you are in software. Get pre- sales before you make, it's tough but it works.
5.Indecision killed most of the profit for us,we were two people protecting each other back and it doesn't help, when you are in such impossible situation and indecisive,we should have closed the business 2 years earlier. It would have saved us a lot money and time.
6. Always have 3 extra advisers on board if you are just two co-founders....to get a perspective otherwise emotions run high and it will be huge drain on the company.
Not able to give time to her , I felt I might destroy myself or her permanently if I hanged around the relationship, it was becoming extremely stressful to handle her and my debt.
So I requested her to let me go and allow me to focus on clearing the debt.
Also I guess the break helped her see me in different light when she was away from me. I just melted to my gf waiting for me 3 long years. I said yes got married in 3 months.
I am incredibly thankful for my parents to keep supporting me with all their might and it's beautiful....that I was born to such family where they go to any extent when rubber meets the road.
Succeeded in one thing - found the right co founders.
In 2 months started working on the another idea (https://doctorc.in) with the same co founders - moved to India. Got funded this August. Could execute infinitely better on this one because of all the lessons learnt in Shoutt. The experience of failure of the first startup is paying off now in the second one.
I wouldn't have it any other way.
Wishing you and your team the best of luck with the new venture!
It's the one thing out of all the other things that you listed that cannot be learned. It is dependent on pure and simple luck. So, I have hopes for you guys if you have that plus a plethora of lessons learned. Good luck! Even though you may not even need it. ;)
That failed. Had a co-founder that wasn't dedicated. Had some tech that I could sell and did sell, but I still considered it a failure because I never hit the mark I wanted.
Consulted, took some jobs with startups here and there. Those startups failed for some reason or another so I went back to consulting.
I'm now consulting and lending myself out to people/businesses with ideas, usually spending about 30 hours a week doing so. I spend another 10 volunteering and tutoring, and another 20 whipping up ideas of my own and seeing if I can find something that I'm confident enough to run with.
My plan is to keep on trying. I have a book of ideas that I want to execute. I'm mostly just waiting for the right idea and the right front-end guy. I'll usually crank out an MVP and never release it because I fear it failing (and I'm not a popularizer); sooner or later, though, I'm confident something will stick when I find the right people to execute with (or they find me)
Right now I'm quite tired of all that, but fortunately the past micro-startup & investments brought in around $300k which would be enough to live comfortably for ~5 years in Poland.
Right now I'm 30 years old, and the plan is to keep on trying. What changed during the past 10 years is that I'm no longer striving to go all in with a financed business and spend 70-hour workweeks. I don't want to build a billion-dollar business. Instead, I want to build something much smaller which will allow me to have personal life as well.
Even though I'm married and have a newborn, we're sharing a place and living like (healthy) college students. We've both turned down huge salaries to work together indefinitely.
I love creating products for people. I love solving problems and I love writing code. The stress of a startup feels like a small price to pay to create something great. And I really want to create something great.
Kudos got knowing what you want and going for it.
We think alike most of the time and if not, we know how to resolve it due to living with each other for a long time. That being said, we do have different roles and only certain parts of the startup are worked on together (frontend app etc..).
Clear and concise responsibilities are what is going to help the most. If you are competitive, you are usually the most competitive with your own blood, which can get messy if you fight over the same thing.
I know we could both laugh/cry it off together if he lost every cent. Others may doubt whether that's really true, but I have my own evidence.
Spent 5+ years at Google after that, worked on a bunch of cool projects, finessed my technical skills, learned how to push through difficult projects until completion, rebuilt my confidence, and recently left to try again. We'll see how it works out this time.
Wow, don't see that one too often (fortunately)! Was it a kinda-sorta-expected thing (cancer, age, etc) or was it out of the blue?
How did you navigate the line between "I should just make money off of my own product and forget customers" vs "I should focus on the product and acquire customers"? Since there's an opportunity cost to doing both, I'm curious to understand how you navigated things with that kind of "fork in the road", so to speak.
Not a single one committed on the spot to give me money despite my API being faster (in GPU and C++) smarter (generating 6% ROI on the dollar staked ON TOP of their juice) and better coded (All Haskell, Python and occasionally C). I was floored. Technology meant nothing to these wealthy people.
I realized that the people who ran the sports books were so lazy and incompetent that they would never understand what convex optimization was and that If I instead committed to learning how to bet, I would eventually grind millions of dollars out of their archaic systems. Quite simply, anyone with enough commitment and resources can outsmart the index.
Its not that they were dolts, but that their focus was not on math and better real-time odds; the focus was on bilking very poor bettors out of their money and preying on them as much as possible. These guys just worked 9 to 5 collected fat paychecks, basically work in palaces with sweet perks, and abhorred (and scoffed) change of any kind.
Once I realized that being smart and capable would never sell, it was an elementary decision. I quit, let my investors down, left a quarter million on the table (which my foolish co-founder burnt through and AGAIN got a $3m term sheet pulled at the last minute by the SAME jewish lawyer investor guy lol) and simply said, life is easier when I only have to deal with myself. The rest is history, I surpassed a half million dollars and now sustain an excellent lifestyle. hit me up anytime at @ess2dashizzleC on twitter. (yah I like snoop dogg)
I've had the biggest temptation during this summer checking out the odds on FIFA games. Although betting on Brazil would've been really bad!
Just keep making stuff, stay afloat, and manage your mood - stay healthy, stay happy, but PRODUCE AND PUBLISH LOTS OF WORK!
Did my own startup; growth was insufficient. Ran out of runway (7yrs of doing startups).
Looked around & got a position as a Product Manager in AdTech, since I didn't want to get back into a dev role, and wanted to move more into the prod/mktg side.
Since then moved into an accelerator working with early-stage startups on mktg/prod.
Life's been much better than I expected when I failed.
Here's a question that is less frequently asked: to founders whose startups met with moderate success wherein it turned into a lifestyle business that could be sustained indefinitely, but never appeared to be reaching the life-changing initial vision, what did you do?
We focus a lot on success and failure as binary concepts, but I think there are a ton of businesses that meet with some success, but fall well short of the initial goal.
I may not have won the startup lottery, but I've never been happier.
I morphed it in to a web development business that did OK, then worked out it was easier working for someone else (got my life-work balance better) - in a VC-backed startup that ultimately got acquired.
I left to finish my degree. Got confused for a year and did a bit of sales. Then another startup that I couldn't get off the ground (services marketplace) - perhaps insanely ambitious.
Then I trained as a teacher (forgot that), teaching inner city kids how to add up.
I now work at Google in partnerships, where I am largely happy, married, get to travel a lot - and occasionally still 'get the itch' ...
That said, if somebody did start that blog I would definitely read it.
The nice thing about having knowledge and experience is that oftentimes it shortens the time required to realize you're making a mistake. Folks who haven't done this before and haven't read about other peoples' experience can sometimes waste years doing something that clearly isn't going to work. If you've read about it before you might catch yourself after a few months, and if you've personally experienced it from the other side it might take you a couple weeks. But it really does require committing the mistake, learning (painfully) from it, and then doing it the right way a couple times before you'll start getting it right automatically
Btw. seems the site you're linking to in your profile isn't working :)
Founders, if you're willing to share your experience on a blog, hit me up. My email is on my profile. Anonymity guaranteed.
I'm not sure about what the format will be yet, but I'm thinking of interviews which will be transcribed, with the audio as an option. I'm open to other suggestions.
I'd say "Anonymity is an option if you need it.", especially these days.
Aside from Internet coverage, Patagonia is beautiful, if you like lakes and mountains (and glaciers)!
1 year later I've inspired my friend to start another startup (service market on national level). Unfortunately VCs in Poland did not wanted to believe that it is such a good opportunity (and it was, currently 2 big competitors sharing this market). But the good thing was that we have inspired another friend to join us and gathered some money.
Now, 2 years later, we've managed to create another startup from all that ;) (http://ElimiApp.com). Just taking off, seed in the bank, fingers crossed!
I think it is just about the way you think and what you want to do in live. I could live very comfortably live from securities transactions (but create nothing, nada) or comfortably while working in some bigger company (no way). Instead I've choose to fight for years for my own thing.
I was non-technical at my first startup (domain expert & business/marketing/sales) and after I shut it down, I spent the next 8 months teaching myself how to build software programs, becoming a now tech co-founder.
I then started my second startup (http://notiontheory.com/) by getting $20k pre-sales in 2 weeks to validate my idea before committing to it.
Attempt 2 has been far more successful and we're already beginning hiring in month 5 bootstrapped.
- Idea I published was novel & since has been copied by oodles, including celebrities, large corps & one copy now has millions of users.
In 2009, after not being able to get my idea out in timely manner I started doing front-end dev jobs. I've been failing at those too for the past five years. I'm not a fast coder.
In 2013, now with technical chops & a solid tech team we created tech that got us invited to demo to entity in the valley and received some good amount of attention. Though the entity in the valley was not nice to us, seem like they just wanted to possibly steal our work & squash us like a bug.
So, Im happy to say I invented something oodles have copied with success & our work gets the attention of entities in the valley.
Though is it worth it if...
Your broke, jobless after Friday, childless, live with a parent, in debt, just broke it off again with cheater g/f who lives with her parent and in five months you'll be 40?
After that I needed to rebuild some confidence in myself, so I joined a small consultancy company as a lead dev. It's been a year since that happened, and now I'm beginning to feel the startup itch again. Working on a few side projects. The plan this time around is to not quit the job and go full time on the startup till it starts producing a certain amount in monthly recurring revenue. Let's see how this goes...
Whenever I want to go into a venture, anyone I work with seems to have serious issues. I worked with someone who was a bit too controversial, another too attached to the business model, believing things will turn around.
All I can say is: Know your founders. I'd go far as to focus on their personal situation, like their risk tolerance, their "philosophy", their personal attachments, etc. The goal for a company is not to save the world, but to make money for you and your partners. If any personal attachment can get in the way, like "saving the world", or "keeping control of the company", it will. My major failure was not seeing this.
At least for me there is a regular salary now.
Now in Myrtle Beach, SC building a startup community with Startup.SC (http://Startup.SC) and promoting an alternative place to do tech through http://WhyNotTheBeach.com. Also working remotely hacking websites (InfoSec).
Looking forward to doing another startup once I build up support network, angel investors, etc.
(Actually in Boston this week for Angel Bootcamp & TechStars Demo Day) - contact me through profile if anyone wants to get a drink.)
Idea #3 was this 'passive revenue stream' idea of making tablet jigsaw puzzles, I figured it would be very quick + easy to set up and generate enough income to cover me for something else. That quickly changed into a full time effort to grow the company as it was so enjoyable having a product that makes money + could be better.
Why did I fail? Well, basically what I wanted to achieve was only a nice idea, one that everyone loved when I explained it. But then, when we implemented it, it was so badly executed that it didn't do anything useful. Then we fell in the feature creep trap, I argued with my co-founder and he parted (because I didn't listen to him, and because he wasn't 100% committed), pivoted into another failing product (at least I managed to sell it and have some real customers) and finally entered into zombie mode for a while (actually the company is still officially in business as I had to take on some consultancy projects in order to pay back €50K in loans we took). Total time of my life spent: 4 years.
In the future, I will try it again, and of course I will do different. First of all, it'll be small from the start (I'm even thinking of doing something that just provides some passive side income, in the level of 1000€ a month). Then it will have to be profitable from the beginning.
We spent 6 weeks shopping the software around in attempts to get acquihired. We ended up with two interested companies after talking to about 15. One made a small offer for the tech and generous offers for us to join the company, the other made just generous offers and wasn't interested in the tech. My partner and I didn't see eye to eye on the offers and were able to convince both companies to take us separately.
Three months later we were introd to a company that wanted to buy the tech and didn't need us to come along with the deal. It wasn't the huge exit we had once hoped for, but it brought some closure and the product lives on.
After a promotion 2 months after joining I'm leading a 13 person engineering team and enjoying having some money and time to spend with my wife and friends. I have some more startup left in me but plan to see this one through for a while.
On the side, I advise startups a bit, which is cool because it lets me keep the lessons I learned in my own startup fresh. I've come up with a couple interesting startup ideas myself, but I don't feel pressed to be a founder again any time soon.
I'd consider doing a startup again down the line, but I'd be very discriminating. I'm entering a more risk averse stage of life, and I think I'd rather position myself to join something as a leader that's already at least somewhat proven but still has a lot of upside. It takes a refined skillset to be viable for such a role, but that's what I'm aiming for.
When we stopped being able to pay me a salary, I turned it in to a real CTO job at a 150 person software company. Our client list gave some real credibility there, as did being able to talk a good talk and looking presentable in a suit.
I suspect this was a phenomenal career move: the previous startup CTO stuff, and any future small-company CTO stuff will be "real" in the eyes of recruiters because I've also managed a big team, budgets, etc - the "real CTO" role validates all the hacking code at smaller companies while claiming to be CTO.
I think there can be a credibility gap for a 30 year old team leader at a profitless company calling themselves a CTO, but having also done a more traditional CTO role at a bigger company allows you to regain that credibility. I can talk confidently about CapEx, OpEx, I've been through a rubber-glove-type due diligence process, been deeply involved in high-level strategy ... I feel like I could spend the next ten years doing 3 people startups again, but then walk in to another "big" CTO role if it didn't work out because of this.
Anyway, ultimately that wasn't what I wanted to do, as much as it was incredible experience. So the wife and I packed off to somewhere warm and cheap, she has a job that pays the bills and for the flat. I'm keeping myself busy by running a one-person R&D lab for a large listed company whose industry I have domain knowledge in, finishing my dissertation, and I've branched in to staffing because it's amazing how much quick cash you can make by messaging ex-coworkers on Facebook (and if you're a Perl developer in the UK: http://perl.careers/)
Because there are so few 150 person companies, most CTO jobs are for small companies.
This doesn't make them any less of a CTO job. In fact, the hard decisions for a CTO are often going to be at the start. Choosing the stack, building the initial team and engineering culture...
So stop questioning yourself.
What happens when you take 10million in VC and then fail?
Compare to a 100k angel round and then fail?
About the same time someone told me may be I should build sites where people can contribute and I wouldn't have to worry about creating content. So, I created this search engine that would index tutorials from all other sites. Built the back-end and some front-end but gradually lost interest to another project.
Then I built this another site with tools for webmasters. This was actually launched with some modest success as by this time I had learned enough about Apache/PHP/MySQL etc. (https://web.archive.org/web/20051215081101/http://viewhtml.n...). But never figured out SEO/traction.
These were in high school and after these tries I gradually lost interest to other stuff. So that was that.
Then in college freshman year started this company to build computer hardware with my roommate. This was actually the first attempt to start a company. Everything else were just side projects. The idea was to build Dell equivalent for Linux.
I think I read this note on some mailing listing about why Linux was not widespread (Android was not mainstream, yet) because there was not any well established distribution mechanism. There was a need to build an equivalent of Dell that would ship computers with Ubuntu and provide user support.
So we bought off-the-shelf parts to build our first desktop computer to sell, built it, and installed Ubuntu. Then my roommate and I had a fallout. So that was the end of this.
And there are a couple of more things that didn't take off. But life was not really impacted drastically as all were learning experiences.
When it came time to look for work I got a decent job offer in the Toronto startup scene as a django dev, but I called up my old employer in Dubai and found out they had not managed to replace me. So I replaced myself! Moved the whole family back out to the Middle East.
You'd think the whole experience has turned me off startups forever, but....
I am building something very simple on the side (libertarian tshirts, since the idea is growing here in Brazil) and I still crave to solve problems.
I'll need a new challenge in a few years, but for now it's nice to be in a routine and be a critical member of a kick-ass team.
Then, I and my friend started working on new startup (https://www.atatus.com/) and got 100 customers in 2 months.
It failed the summer after college (after starting it a year before). Now I'm at a coding bootcamp. I'll work for a year or two, and then give it another go.
All of these actually set well after my startup actually 'closed' as right after the closing I was too buzy getting my employees and my guys placed in other companies.
I've worked at a few different kinds of companies, and there are good and bad aspects of each kind of company, each stage of development.
There is hope. I only know because I feared the future, and came up feeling better than I'd imagined, once I had some support.
Meaning, startup to "big corp" or "any company" doesn't mind you were bouncing around.
I'm just curious how dev's go through the interview/hiring process with the jumping around like that. As a more Operations dude, it hurts me pretty badly, even though I "jump" a lot with startups. Requires more explanation.
And then back to another startup. ;)
A friend and I were out of jobs and eager to test an idea we had about local real estate which had the potential to scale. I raised 25k in seed money from family.
That person was more biz/sales oriented and we hired one of our other friend who had experience building software. Both of them became lazy and uninterested after a few months and quit as soon as we ran out of money.
I worked at it for almost a year, alone with a part time admin assistant.
Managed to pay back the seed money and "live through" that year but ended up very tired and still broke.
One day I get a call from a MBA in a similar industry and he was very excited about the model. I was tired, broke and felt lonely, I easily got convinced to re-launch under a new name for a broader market. (original was in french)
Created a whole new business, new name, new website, new everything. With the technical side mostly handled by me. 3 months in just as we were about to launch the new partner starts arguing all the time and suddently didn't trust me. We were not even putting our new version in front of clients yet and he was panicking.
He forced a shut down of the business. It was the second time I was building this model - was still broke and exhausted.
I felt relived and thought I'd go work a day job for a little while. Then 3 days later I'm sitting with one of the client of the first business and for him it made such a difference that he trying to convince me to try again and offered 100k in investment.
Worked my ass off again for launch #3 - except this one I was aiming for the stars and had 100k in bank.
Made a huge mistake in hiring technical talent, took us months to get a shitty product out.
Made a huge mistake in hiring admin talent, burnt through 15k until we had to stop working with that person.
And worst, 6 months in, as we're trying to hit it really hard we realize that the real estate markets we were after slowed down dramatically (40%-50% drop in sales)
So we ran a test campaign and indeed, it confirmed a huge drop.
I had to cut on every aspects of the business, let go of hires, go back to the plan and do a lot of thinking. We managed to survive a few months but it was extremely hard to get money out of clients because they knew the market was down and felt like they would waste money by investing in our platform in such a downturn.
We had to pivot our business model and our client approach multiple times in the last 3 months. Which in retrospective brought me tremendous knowledge and made us try new innovative tactics to help my clients and show them that we could be trusted.
Slowly but surely we've started to generate revenue and I'm proud to say that in the last few weeks we've actually hit our target, we're no longer digging ourselves in a hole.
I'm now still completely broke but at least I can pay our team every week and I know that it's not just money that we borrowed but money that we earned and I'm confident in our new way of doing things.
Reiteration works. It will get through anything, look at water. And so will I.
On another note, I wanted to ask about the admin/personal assistants. Why were these roles necessary at this stage in the company? Asking because I'm seeing more of this, but even with the funding I've raised it's still a hire I don't feel like I can justify.
About the hires, it depends on your business and where you are I guess.
In my case the idea was a new way of marketing new constructions online.
I managed to get 23 new home developers as client. That along with the 900+ prospects I've qualified and followed up with during the year.
Combine that with the fact that I was the only one working on the website and our system in general. kept me extremely busy and I needed someone part time to hold the books and do the small monotonous tasks.
Someone may be a good developer, designer, or co-worker...but that doesn't mean they will make a good co-founder. I learned this the hard way..and it was painful.
I now run a small business with 2 other co-founders..and have been profitable since day one. I quit my job over a year ago and never looked back.
2008: Pivoted to a somewhat more scalable and clearly defined small business.
2011: Started a true startup.
2013: Realized I'd started the wrong startup. Got a job at somebody else's growth stage startup.
~2018: Will start another startup. But this time I'll have a hell of a lot more understanding, expertise, connections, and
What's the difference? Truly curious. The singular focus?
They're all b2b with high ($500k+) customer lifetime values, but the first business, in the best case, could serve about 30 clients simultaneously. The second could serve (in the best case) a few hundred. The startup could serve thousands.
The truth? Ugh. The pitch is that, even if you fail, you'll learn a ton and be slotted into a much more senior role in your next job. The reality? Yes, you do learn a lot. However, you get the same kind of job you would've gotten before the startup. Not more. That 2.5 years you spent building a complex product from scratch? Fucking wasted. In your next job, you're still going to be assigned to legacy maintenance, and random bugs and tickets like any other junior, not given real work and a meaningful role.
I consider this pretty dangerous, because there's nothing worse than gaining 2-3 levels in ability, but having to linger at a low level because your startup's failure (which may or may not have been your fault; in my case, it wasn't) invalidates the experience completely. You might fare better, psychologically, if you don't go through the startup and gain levels of experience that you won't be permitted to use in the next job. It's easier to function if you're at-level than if you gain 5 years of experience in 15 months but no one believes you.
It's pretty humiliating and you might break. (This was my Google experience. Granted, I had a rotten manager, but the psychological load of coming off a failed startup didn't help the situation.) I think the whole "nothing bad happens when your startup fails" pitch that you hear from VCs is disingenuous. VCs fix some peoples' careers after startup failure, but that's not going to happen for an early employee (E #2, not really a founder) of a company that didn't even make it to the A round.
This isn't just an issue that I faced. I know plenty of hiring managers who worry about ex-startup people, not because they take the failure to mean anything about the person (for some good news, that stigma is mostly gone) but because they know that people who did startups are (a) a rank level or few beyond where they'd be slotted based on seniority, and (b) have chips on their shoulders. It's a valid concern. When it's an acqui-hire, the founders are usually tired of startup stress and ready to take a (still well-paid and high-status) subordinate role, but after a startup just fails you get someone who feels a need to prove himself and won't be happy being re-slotted to a second-year junior programmer.
So... to answer the question, it's not an easy road. After a short spell at Google, I consulted with a horrible startup (that I've taken off my CV, and that inspired many of my cautions about startups, see: http://michaelochurch.wordpress.com/2012/07/08/dont-waste-yo...) that wanted to hire me as VP/Eng but only if I disparaged, in writing, the work of 10 engineers, many of whose work I knew nothing about. (I turned that offer down.) Then I worked in finance for a while, did a bit of consulting (including lottery design and technology selection) and have done some R&D (new product development and data science) in Baltimore. My life has gotten better, and with the blogging and the fact that I'm starting to know a few things about in-demand fields (machine learning, Haskell, Clojure) I'm now finding reasonable demand for what I can do. It's been a lot of work to get back on track, but I have, and I'm probably stronger for having had to fight this hard.
I think that, in the long run, the experience is good for you. The year after (or few) can be hell. The pitch to the effect of "even if it fails, you'll get a great job afterward" is not really true. It's true for founders who line up with marquee investors and whom the investors really like, but in the average case and for people of average means and connections, the outcome seems to be neutral to negative.
My case is just one data point (and an atypical one) but I think that most veterans of failed startups (early employees hit the hardest, then founders, then late employees) will admit that their careers have been set back, not accelerated, by them. It's certainly not fatal, but it causes a loss of time and, as you get older, you realize just how finite that is.
Wow, this basically describes the frustrations I had with my previous job to the letter. While working there as an engineer, I also founded a successful community service non-profit on the side. Even though it was nothing like founding a "real" company, it still gave me 2.5 years of really solid experience with building, managing and leading teams of diverse people (among lots of other things). We became really successful in our space. It was great.
The problem? While working on the non-profit, I first caught up to and then surpassed my boss at my day job in management and leadership ability. He was my senior, yet I would see him make mistake after mistake, and I'd think, "wow, I made that mistake like, 3 years ago." I tried to help but he wasn't interested - he is very much the "do my job during the day and then go home, drink some beer and watch sports" type of guy. No drive for self-improvement, even when it became obvious that he was severely lacking. I ended up building a lot of contempt for him, and when my frustrations became too much, I left.
You can always get a job after a startup, but whether you will feel happy and satisfied in that job is a much more difficult question.
On the other hand, if the website is taken down and you cannot show what you did, your position would be much weaker.
I don't think it would have helped. The truth about Silicon Valley/VC-land ageism is that it cuts both ways, if you're not well-connected. (Kids with rich parents can raise VC at 24, average people can't.) Your calendar time sets an upper-bound on where you can be placed, and while an impressive open-source portfolio can make getting the job easier, it doesn't get you a better job.
Thanks so much for taking the time to write this.
Finishing a prototype this month and going to try it again, this time with a long time friend on the business side, and a developer who knows more than me on the tech side. As a leader you never want to be the smartest guy in the room.
Biggest take away was that leadership is far more about inspiring people than giving orders, you have to inspire people personally, and then inspire them on the shared vision.
Joined a job on the side, which would help pay my bills and help my family settle down. In the meanwhile, I would be chipping along to build my small revenue generating startup.