I think it would be good to hear some personal stories of startup failure so we can all learn from them.
What went wrong? What did you learn for next time and can pass on?
How did you recover and what are you doing now? Having failed once, would you try again?
The software was a small business system for manufacturers and distributors. I was the technical person, my co-founder was the business person.
How we did things:
- We determined the customers' most critical requirements.
- We built what they needed from those requirements.
- We installed the hardware and software.
- We got them up and running in "test mode".
- We adjusted, reworked, and went live.
- Critical features were invariably missed. I had to add them.
- There was always some scaling issue we missed. Always.
- Architecture had to be reworked with every install.
- My co-founder was able to sell far faster than I could build.
- My co-founder was unable to help me build.
- Customers became disillusioned.
- I collapsed, vowing never to go through this again.
- Make sure your MVP is enough.
- Beware being consumed by customer service.
- The first two founders must be technical.
- Your architecture must scale, even if your app doesn't.
- Always be brutally honest with each other at all times.
- Make sure all your failures are recoverable ones.
- Plan for 40 hours/week. Stop working at 80.
- Never quit. Start over, but never quit.An oldie but goodie - http://www.youtube.com/watch?v=EZxP0i9ah8E
My co-founder was able to sell far faster than I could build Customers became disillusioned I collapsed
Which comes across in the albeit very brief description as the root of your problem, it sounds like you didn't actually follow that "standard advice".
That reads like you started scaling before the product was actually viable, which is borne out by your first point of what you've learnt.
I also think I disagree with point 3 of your conclusions, if your partner had been raising funds instead of selling you could have employed more people to get the product ready. Easily said with hindsight I guess.
Also, it's better than a biz-focused co-founder who doesn't sell anything. Then you're just dead in the water. I think the key is to find a biz person who's moving just as quickly as you are, and you move quickly together.
Really now? In my experience it's not that rare at all. Throw in the very common scenario of management that doesn't understand the need for things like refactoring and code maintenance, and it's downright common.
- Timing was awesome, I was riding the same wave that Youtube rode (Youtube started a few months later I believe).
- I got lots of high profile press from riding this wave (New York Times, Wall Street Journal etc etc). Press is mostly about riding a wave they want to write about, and being available on the phone.
- I failed mostly because a) I couldn't execute well enough, and b) it was too early for the actual idea. (The idea was that you could easily gather video from all over the web into your own stream and then watch that on your computer or tv). The idea may also have been simply wrong. But mainly I couldn't execute well enough. Not enough coding power.
- I did great with community engagement: the videobloggers were all behind me, even though the product was fairly useless. The site was explained in various books. I had a steady trickle of about 100 new signups a day.
- Selling it was the right decision. It took my mind off it and on to new projects.
- The first working version was a real weekend project (took about 3 days to write the video aggregator). But then it took up much more time than I ever thought.
The 2 greatest lessons where: 1. It's a marathon, not a sprint. 2. Execution is everything.
See also: http://www.slideshare.net/petervandijck/2-lessons-from-my-fi...
Also, and more important than the money, the product never became what it could/should have been. The idea had (has) potential, but we didn't get there. The users that signed up didn't get real value from the product in the end. It became more of an SEO play. So that's where it really failed, in my mind.
The time you spent you spent both building something and learning a lot, that's worth more than several years of education, you are now better prepared, smarter and wiser and I'm sure that your next venture stands a much larger chance of significant success because of all this.
Trust me, nobody that ever 'scored' scored on their first project unless they got wildly lucky or aimed really low.
But as a startup, it failed :)
It was the first one to hit the App Store, and I had some nice conversations with Tobias Lutke of Shopify. He hooked me up with a New York Times interview, promoted the app on the Shopify blog, and there was even talk of buying the app from me. It was very, very basic, so I held out with the intention of fleshing out the feature set before considering selling it.
Six months went by, and I always seemed to find things to work on besides the app. Tobias even gave me a heads up about a competitor hitting the App Store. A few months after that, I found out that Shopify bought the competitor app for a pretty decent sum of money and made it official and free.
Had I worked on updates for my Shopify app instead of taking on the (fairly low-paying) clients I did, I probably would have made much more in sales than I did with client work, not to mention whatever price I could possibly have gotten from selling the app.
From the whole experience, I learned to manage my time, money, priorities, and client base in a way that allows me to give a lot more time to my own projects.
Would you say its more lucrative to sell apps on apple store or build web sites?
<script src='http://affiliate-script.com/adBuilder.php?q=iPod></script>
Additionally the ad builder always showed the most current and popular products, so the iPod query would always return the latest and greatest best selling Apple MP3 player.
The startup worked fairly well. It served more than ten million ad requests, and made about 500 dollars. I eventually abandoned it due to lack of interest. The only active users of the system were my own blogs and websites.
I recycled the code to form http://bookflavor.com, my new and current startup.
Perhaps with thousands of visits a day it will make sense, but for now I'm trying to keep expenses low.
A partner and I decided to create an iPhone app just as the App store starting booming. The idea behind the company was to create simple fun games. As we started coding, we quickly discovered that neither of us were artists. Since we were bootstrapping, we could only afford a finite amount artwork and the game we were designing would require a ton of art. So we built a simple animation builder that would greatly reduce the amount of work. Once we built this thing, we thought it would be a great idea to make the animation app a consumer product. The idea was to let you make animations of your friends using only a picture.
We programmed the app and kept on adding features. After a long year, we finally decided that it was time to release it into the wild. We submitted it to Apple and waited. While it was in review, we received a number of great reviews from cultofmac and others. Then Apple rejected it. It took us a week to find out why. We removed the offending content and re-submitted. It then took Apple 6 weeks to finally review it again. I think they finally got around to reviewing it because Gizmodo wrote an article about it. At this point our morale and wallets were empty.
When the app was finally approved, we set about marketing the app. With an advertising budget of zero, you have to be pretty creative getting your idea out. We created about 100 animations of prominent tech journalist and sent it to every known email address of theirs. The reception was dismal. We even received some take down notices (which we promptly abided by)
After a few more weeks of more failed marketing attempts, we decided to throw in the towel and get real jobs. The app is still on the store: http://itunes.apple.com/app/itouch-my-friends/id335338942?mt...
Main points learned:
- Ship early!!!!
- Don't let events that are out of your control get you down.
- Getting press about your product is hard. It is a lot easier if it has some controversy around it.Did you ever consider outsourcing the artwork?
The founders were serial entrepreneurs with a good track record and a lot of clout. I would summarize the reasons for failure as the following:
1) Obsessive efforts on patents, sucking up valuable time of key people. 2) Not enough nitty-gritty technical folks. Literally half of the staff were "Vice presidents"-- if you can even imagine that. 3) I remember reading Guy Kawasaki's 10-20-30 rule (http://blog.guykawasaki.com/2005/12/the_102030_rule.html) and laughing at what were putting on-- more like "200 slides - 8 hours - 10pt font". 4) We shoulda made a more convincing prototype. We could have done it if less time was spent on patents and bullshit.
The founders had been successful in a much smaller domain. They made a lot of money and, I think, wanted to raise the stakes. It was a reach and it didn't work. However, I don't think anyone has/had hard feelings. We tried, learned a lot, and got to do some interesting stuff.
I now work for a boring company to pay the bills and do moonlight freelance with a buddy. If we ever go down the start-up route, I doubt we would ever attempt getting VC funding. I prefer keeping things small, manageable and profitable-- even if the profit is small.
I wrote about the story here and extracted a few lessons http://destraynor.com/serendipity/index.php?/archives/179-Le... It's a good read (though I would say), I'm not pimping for traffic here, just letting you all know.
My main takeaway is that if you're building a business that depends entirely on another service (whether it's Bebo, twitter, Facebook, iPhones whatever), you're at the mercy of someone elses business decisions. If you're planning on building something valuable to last a long time, then that's the wrong place to start.
HTH
http://news.ycombinator.com/item?id=1755831
Maybe this one qualifies:
I got some funding and some co-founders... and then sort of floundered (too young, too inexperienced, too big a task).
The fact that this problem has not been solved still gives me a little heart :)
So the question we went for was "can we build a trust based social network where peoples interrelations helped show others how trustworthy (aka sound) they are".
The long term idea was to kick of a trusted identity scheme and wrap a social network on top. The build out from that was a social dating site which we would monetize.
It failed for a few reasons. The concept wasn't well defined, and neither was the problem in all honesty. We were excited about the tech and less so about the execution, spent a lot of time working on the caching code and some framework code etc. and not enough time executing the idea. We never launched (though we could have a couple of times).
The other problem was that the idea would have synced with the tech crowd - but probably less so with the mass market, and we didn't put any thought into how to get the idea across to them.
It wasn't a total failure; I sold some of the code to another social network startup for a lot more than it was worth. They were a VC backed outfit that floundered shortly afterward - so I wasn't the worst example out there :P
Message received 100% clear.
A post about a post, that just quotes it and links it, doesn't add anything, so I see no real reason to not link directly to the source?
(Not having a go at you, just explaining why I think the source was more relevant in this case).
I just think your blog links added no direct value to this discussion. I think posting links like that here when they are just forwards to someone else's content looks a lot like self promotion. (And I'm not saying it was in intended that way in your case, just that it often looks like it).
I think you have to be careful to balance self promotion so it doesn't come across too spammy. Especially in places like this where the audience is tech oriented enough to recognise what's going on. I'm just saying that I think the redirection links you posted looked a bit like spam.
Don't get me wrong, posting links on your blog to things you find interesting is great, and I do exactly the same. And linking to your blog when it has original content relevant to a discussion is helpful, but when just referring to the source in a discussion I think it's better to quote the source directly rather than adding a layer of redirection.
Also; what if your site went down, the link would be broken and the valuable content lost. By linking directly there is one less point of failure so the linking is more robust.
Without trying to sound patronising or arrogant in any way; I hope you don't take this as message to stop providing comment or content on discussions here. Rather as a message on it's preferred form. I hope you do continue to contribute when you have good links.
(I did up vote you for providing the links by the way)
I'm not a big fan of blog-spamming either, and I can see how those particular links could be seen as such. Most of my links actually include some additional insight (and one of those did). It felt like a fair trade-off that I'll go and find almost ten high-quality answers to your question and in exchange get to at least post them with the link from the resource on which I collected and found them...
Bah. I'll keep on sharing my links, but next time I'll tend towards just sharing the links which have additional insight, so I am less likely to be accused of blog-spamming.
I wouldn't say it was a failure (it led to numerous other opportunities and friendships and we eventually had a small exit) but it was certainly not the success that we had all envisioned.
You can visit http://9rules.com now and see how the site is set up. It's been the same since before the acquisition.
Here are some facts about 9rules:
- 90% of our site visitors were newcomers. The vast majority of those were coming from Google. At one point we had a 9 PageRank (then it dropped due to stupidity on our part) so we were ahead of all the blogs we syndicated on Google.
- We were great at driving traffic from 9rules.com to our members. Not Digg-like (the measuring stick of the time) but more sustained traffic. And a ton of these visitors subscribed to the member's RSS feed.
What were the problems?
- The typical website visitor accessed 9rules, found a blog (or a few blogs) that they liked, visited that site, subscribed to their RSS, and then never came back to 9rules. Traffic never took off because it was continuously leaving and turning over. I guess we were too good at highlighting our members, but hey, that was the point of the site as we envisioned it.
- We had a pretty well-known brand, but had far less traffic than people thought we had. I sold ads for us for awhile and we couldn't do CPM-based pricing because our traffic was just too low for it to be effective. We had to hand-pick our advertisers and do special adver-torial advertising campaigns each time that were more of a brand buy than a traffic buy. Custom design and lots of work for each one since they were all totally different with different executions. This never scaled.
- We were too ahead of the curve, or something. We had a "lifestream" feature before anyone else really had that (integrating 5+ social services into one page sorted by time). We also had a question & answer section where each one could be starred, upvoted, or downvoted, back in 2007 or so. These features were awesome to develop but they were too early in the lifecycle of social network adoption to really take off.
- Couldn't get traffic to stick to our site. I mentioned this before, but if you're trying to build up traffic you need people to STAY at your site and keep coming back. We developed new thing after new thing to keep them there but it really never kept the traffic like we had hoped.
Lessons learned:
- Building something cool that a lot of people love doesn't mean you'll get rich off it. We had 9rules members tattoo the 9rules leaf logo into their arm. People had parties in Malaysia when we had a new membership round. A wife of a member made us all 9rules leaf pillows (it's on my desk in front of me). People thought we were millionaires based on our brand presence but we weren't. Not even close.
- If you're not motivated by money when you first build your thing then it'll be hard as hell to make any money. We built 9rules because it was a cool idea we had. We envisioned this great site with all these great features. We didn't think too much about a business model beyond ads.
- The relationships we made while running 9rules are priceless. Almost every good thing that's happened to my career since 2005 I can attribute directly to 9rules or recognition that 9rules brought me.
- Selling ads to put food on your table fucking sucks when your traffic isn't booming. You have to be scrappy and determined, and if you're both those things, you're still behind the 8 ball because you can't get on the major ad networks unless you have 5M+ pageviews per month.
This goes for me, too. As a former member, I'm grateful for the work you guys put in to build the site and especially the community. I met a lot of awesome people.
Thanks for writing this breakdown. It was an interesting read. I was always curious about what happened when you guys went your separate ways.
Im still looking for advice from HN really.
I started with http://fefoo.com some 4 years back and finally launched it one and half year ago. I got some good initial feedback but almost very little coverage in blogs or twitter.
I completely failed in promoting it to the target audience. Since it looks like Google the comparison would inevitably come up and most "bloggers" would not even give it a second chance. It was for people who use more than one search engine, but without the right promotion and zero marketing skills it almost never got any coverage.
Its still not dead but I am keeping it alive as I use it and a few hundred people seem to use it.
To me the most useful feature is the in site toolbar with the buttons expanded that just allows you to quickly switch between different sites results sets.
I suspect though that for 99% of users Google is all they ever touch, and the other 1% use a browser toolbar of some kind to redirect their searches. After all, in FF it's only 1 click and an enter keypress to switch to a different engine (assuming you've got the ones you want setup).
Have you thought about displaying multiple results side by side (or even interleaved)?
"More results relevant to your search: Bing (20,000) | Yahoo (13,450), AOL (3450) ..." etc.
Or using async calls for conducting the same search on an alternate engine while the user is still reviewing the first set of results, and showing just a peek to the new set of results...
Through pure luck we gained the attention of a semi-retired ex-executive VP who had worked with a top 5 marketing agency in the US. We immediately formed a partnership with him leading the sales and us developing the product lines. We were able to quickly gain in roads into companies such as The LA Times, Toyota, Dolce&Gabbana, and a few other big name companies.
By now you are probably thinking wow you struck it big, and at this point in time we thought the same thing. And this is what led to problems. First, in dealing with bigger companies such as this the sales cycle lasted a LOT longer than we anticipated. We were burning major cash just to touch these clients. With letters of intent and credit notes from the clients in hand we borrowed, borrowed, and borrowed more. But the problem was that our development hit snag after snag and was delayed extensively over time. The clients lost hope and we began to see the walls come crashing down just as quickly as they went up. In the end we walked away with nothing but debt and a couple torn relationships.
Lessons learned:
1. Focus on a single product. Don't over extend yourself. 2. Make sure you at least have a working MVP before opening the sales gate. 3. Be prepared for delays in the sales cycle. Don't expect the money to come overnight or at times even within the same month (especially true when dealing with big name clients). 4. Make sure you have a strong leader and strong core team. One of our biggest downfalls was that we had to many chefs in the kitchen each trying to put their own ingredients in the pot. It was a nightmare. Don't be concerned with titles when getting started, but make sure everyone knows what their position is. Make sure there is one leader that is capable of handling the management. 5. DO NOT hire a marketing/PR company when you are getting started. As we started to gain attention and began talking with investors one of the things we did was hire a marketing agency to help us define our pitch. A big mistake and waste of money. 6. Make sure you have a strong attorney who is capable. We had a great attorney who helped us extensively, even in the worst of times and even when we were unable to pay him on time. 7. Don't spend cash you don't have in the bank already. 8. Related to #4 above, make sure your co-founder(s) all have a stake in the success/failure of the company and choose them wisely. I had some great co-founders, but I had given up everything to pursue the dream. They in turn each had something to fall back on. While their drive was great, they also knew that if it failed they could go back to their day jobs the next day. Me on the other hand I didn't have that instant fallback. 9. Get your sleep and eat well. I gained almost 50 pounds during this time period. It came from eating on the go constantly and sleeping for an hour here and hour there.
I know a lot of these are common sense and I look back now thinking what in the world were we thinking at the time. How could we F-up so bad. But in the end the fast moving nature of the company coupled with visions of huge success in our heads easily distracted us from the bigger, and true, picture. We were enticed by the big money, when we should have focused on just getting the product completed and the business itself. We are still cleaning up some of the mess, but are at least moving in the right direction now.
In the end we are back to the drawing board again. We have a new product that we are working on, but you better believe we are taking a completely different approach.
On a side note, I think this is a great post topic. Learning from others is valuable. But more importantly, if you can admit your mistakes, work to correct them, and move on from there it will only improve your chances of success in the future. One thing I have learned is not to criticize others for their mistakes. Everyone is going to make them, it is how you recover from them that makes you a better person.
What went wrong: - Timing -- We were either ahead of our market, so we had significant head wind making people realize that there was something there. Also, we hit the tail end of the boom, so round #2 of money was at a really bad time. - Focus -- We had three projects, we should have had only one. Plus assorted other revenue generating consulting. - Technical -- We made some unfortunate technical decisions, and because of that wound up duplicating a lot more infrastructure type code than we'd do today. We also wound up with version 2 looking just like version 1, but with a much better data store. The 9 months that that took would have been better spent making the user side better - Personnel -- Single founder, one under-experienced lead developer, and two other devs from completely different software cultures who never meshed well. Any better team members would have realized that this was mildly disguised anarchy and beat someone into shape. I know I probably should have been first in line. - Sales and Marketing -- We were selling to non-profits. The sales cycle was long, sometimes approaching a year. If you have lead times like that, you need to be well funded and in for the long haul, not trying to piece stuff together and sell individual features for dollars.
Next time: - Fringe platforms should be looked upon with suspicion. I'm not saying that you should avoid them, but had we even started with LAMP (or linux/apache/postgres/p-language), we might have had a fighting chance. Initial time to market was great, but I'd say that within 3-6 months, it was a drag. - One founder is tough. He was way too split between fundraising, selling, and direction. Also, I mocked some of his code when I found holes in it, so he didn't really trust his technical ability as much after that. - Developer compatibility is important. Mixing a MS alum, a debian developer, and someone who grew up on a fringe commercial platform is a recipe for disaster. - Money -- Make it easy for people to pay you for stuff. Long billing cycles are awful. Long sales cycles are awful. One of my metrics for if a business has its shit together is if they can get invoices out fast and correct. - Know when to quit. -- I hung on too long, because it looked like there was the littlest bit of hope, and I could deal with missing a paycheck here and there. Now, I'd probably have called it off a lot faster and gotten on with the next thing.
What now? I did consulting for a while till I found a job with the current company. I'm working for a small company, different set of issues. Technically, we're in a ton better shape. Financially, too.
I'd do it again, but I'm not 100% on that, since I've got kids that are really my startup project right now.
1) Made an Iphone App called Obama McCain Polls. A polling application tracking Smartphone users polls by state, gender and other categories. Was supposed to be launched 15 days prior to the Elections. Apple delayed it and launched it on the eve of the elections. Made 500 users in 5 hours but the election ended and so did interest in my app.
2) Feeding off the 5 hour stardom effect, created a new application called Intimate Secrets. Again a very interactive polling based app to cater to users of all age groups, marital statuses and interests. Getting polls on questions that usually don't get asked. Had amazing success the first two days where the application was displayed on the most recent app page on the app store. As soon as app went to the third page downloads dropped again. Try to run a marketing campaign on Google and partner sites spreading awareness of the app. But the only successful way to market an Iphone app is to market it on the App store and there was no way of doing that back then. So the list of failures grow.
3) Switched focus from smart phones back to the web. Created an interactive portal on facebook to merge Social Commerce, Affiliate marketing and E-commerce. App was called CareToShare. Where the user will receive affiliate earnings by sharing their purchases on facebook. Friends will get promotional discounts and the companies will get more sales. Thought it was a win-win model. Presented it to companies like BestBuy and shopping channel. They weren't that willing to change their marketing campaigns or I wasn't convincing enough. So CareToShare remained in sandbox and didn't see the light of day.
4) Latest Venture Social Genie (http://www.sgenie.com). A Facebook app that provides you an interactive tool to make a wish and share it with your friends. Your friends can make contributions through PayPal. The app also allows you to see all the wishes made by your friends along with list of contributors, comments statuses. With this app I am competing with major players like FundRazr (lets users instantiate fund raisers) that have already stroked partnerships with PayPal. PayPal is promoting their app to all their users and are heavily investing in the company. When asked PayPal for similar support for my app, so far all the inquiries have been ignored. So I guess another failure on the way.
What went wrong? The fact that I am a social outcast and need to make connections with the right people to support/market my business. Entrepreneurs like me struggle to find innovative ways to solve problems within contained niches while all the big players use their monetary assets to create new demands with little or no productivity.
Would you try again? Yes unfortunately this exercise keeps me busy and focused. I don't have a better way to spend the remaining years of my life. Just the hope that one day I will lead a successful online business keeps me going.