My failed bootstrapped startup: a retrospective.
blog.beautifulsavings.com
blog.beautifulsavings.com
It is awesome to read about someone like you (local developer, similar learning style, beginner entrepreneur) who actually builds something. There is a lot to be proud of for just Doing Something - even if you fail. But at the same time, I feel like I would fall into the same pitfalls that you mentioned.
I am not looking forward to doing anything related to setting up an LLC, doing sales calls, etc. I like my job and don't want to quit. I know other developers but end up working on my own stuff alone in most cases.
Thanks for sharing Aaron - I'll have to try to make it out to the next Devs With Side Projects meetup.
Take the lessons you learned and start again. Sooner rather than later. You'll probably fail again too, but eventually you'll stumble upon something that clicks. The key is refusing to give up.
Perseverance is much more important than any idea, programming language, or system of doing things. People who get it all right on the first or second try aren't skilled entrepreneurs. They're just lucky.
He lists a few signs of a successful entrepreneur. A desire for control and the ability to challenge authority are near top of the list. A way to detect the second trait? "Have you told your boss to shove it?"
I've found that when you are working full-time on something, your mind is in a different place. You can also move much faster.
Now, whenever someone tells me that such an such angel asking him to quit job to show commitment to startup, I tell him to tell angel to write a check for $X and then you will leave your job. Don't quit job if someone want to see that as your commitment to the cause.
It's tough to juggle both because you have to switch your mind from one thing to another. Not only this, but if you are working full-time and working on your company in your free time, you have little time left over to just relax. This caused me to burn out a couple of times a year.
Another concern of mine was that the company I was working for would try to claim ownership over my projects if they ever became successful. Even though the code bases were completely different (and so were the industries), I never wanted to take that chance.
I suppose I could have just put everything out there and told my former employer what I was working on, but this would have caused lots of problems for me.
I'm in a better place now and I've accomplished more in a week than in a month when I was trying to do both. I am also in a good position because I don't have a wife or kids. I realize that not everyone can do this.
If you don't have any money in the bank, then you shouldn't quit your job. However, I feel that it's better to quit your job after saving money than toil away for a much longer period of time trying to do both.
I suppose it also depends on your startup. If you are trying to start the next zany Twitter or Facebook app or your goal is to just get funding, then yeah, maybe a year of savings won't work...
A friend of mine had a great idea that we are going to work on and I just thought it's now or never. If I try to work and do this on the side, I don't really see myself putting in as much as I could and it would be a regret down the road.
The "To quit or not to quit" question isn't so black and white. Definitely don't quit if you are living paycheck-to-paycheck but if you have at least a year's worth of living expenses saved up, I think it's worth it to give it a shot.
Yes, some people build businesses while they are working full-time. Other people need the motivation or time of giving it their all. It's a case-by-case scenario.
In addition to this, a full work day sucks most of the creative energy out of me. At the point when I would just be getting to my side project, all I wanted to do was take a break, which I pushed through, but my projects suffered.
PS. I like your equity calc.
In my case, I tried to take on the behemoth that is Intuit. I spent 2 years working on the same side project. In my third year, I decided to quit my job and focus on it fulltime. Six months into working on my startup I realized that I made the mistake of trying to pick a fight with Intuit since the product that I was building was too much for me to handle.
I decided to switch course and focus on niche products for the Mac App Store. Two months after my pivot, I was making a few thousand a month from my apps. I've since accepted fulltime employment and am continuing to work on my Mac Apps as they are still generating the same amount of money.
From this experience I learned its best to focus on a niche market if you are a one man band. I think your failure was because your focus was too wide. Perhaps for your next project, you should consider focusing on a niche market.
Good luck.
I think that technology in this space will play a greater role in the future (mobile, targeting, etc.) but for now the winners are those who sign up the most businesses and the most consumers.
I don't think the author should give up on startups entirely; it sounds like they have indeed learnt some skills and can apply those to any number of future projects. At least they have worked out this space is not for them!
That said, I'm stupidly well-placed to be working on my own idea, unpaid - I'm using the self-employment assistance program through my state's unemployment department to get UI checks without having to job hunt (I do, however, have to submit business plans and the like). I also have enough in the bank to cushion me when the government cheese runs out.
It's an incredible hack, really: the money you "have in the bank" (you don't have it, you lent it to your bank and they 'owe' it to you) lets them play with some multiple of that amount (10x? 2x? 100x? Don't know the exact figure.) They put that into some bonds or treasuries that creates "government debt" but gives the govt. cash to pay for an "self-employment assistance program" (and countless other "programs" as well as their own "cut"). The only however-unlikely risk? There could be a distant day in the future where both the govt. and the bank fail you at the very same instant without recourse -- of course, we're both hoping that day won't ever come -- but if it does, you will kindly not riot, deal?
I keep seeing stories of start ups that are a huge success, launching or died.
Where are all those companies in between? Perhaps it's a combination of not being exciting to report on and founders being busy (both of which could be related to working hard).
Anyone know of place for those between launch and dead?
In between "I'm shutting down because of lack of traction" and "I just got acquired for $20 million" I know a few people whose startups have become "lifestyle businesses". Though that term seems synonymous with failure on HN, for the people I know, it means being the boss, not having one, working from home (or Hawaii, Thailand, etc. for a few weeks at a time) instead of working in a cubicle. They're making anywhere from $150k to $240k per year, and will likely continue to earn that but not much more because the businesses don't scale easily, but they're doing what they love.
It's never easy to watch something you've poured so much work into fall apart like that, so my condolences on your loss
I think though once you find that idea that you're genuinely excited and passionate about, you'll find that failure only occurs when you decide to stop iterating. If a person has a solid idea and solid execution, I find it hard to believe that the end result will be graded an "F", more likely it'll be a C or D, unless you are very very unlucky. The idea is the that the next iterations bring it to an A or B.
"I dropped MongoDB in favor of using a relational database"
I wonder what made him abandon a perfectly good datastore in favor of a SQL thing, because everybody knows that http://www.mongodb-is-web-scale.com/ ;-)
Except in my case, since I was learning as I went, I didn't have time to figure out why the less-mature technologies weren't working just right. Or I'd look at a problem and see it solved nicely for relational DBs, but still needing some manual work to make it work with a NoSQL DB... and when it came down to actually getting stuff done, I hated writing code I didn't have to write.
That's actually an interesting thought: if you're trying to learn a technology, doing a startup is the wrong thing to do. Because ultimately you are just wasting precious time on things that the business side doesn't care about. I hit that "conflict of interest" quite a bit through this process.
1. Spend too much time futzing about with the technology. No one cares.
2. Spend too much time futzing around with stuff you think a business needs to be a 'real' business.
How were you making money?
"Double your price": http://news.ycombinator.com/item?id=1639712
My argument would be that without at least 2 of these 3 the OP will keep running into problems and keep blaming extrinsic meaningless things.
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Credit to the person (aaron?) for writing this. However, the lack of measured numbers is terrifying. And the disconnect with the customer perspective is just hard to fathom.
1) How much time did you spend on this? Over what period of time?
2) How much traffic did you get? How many people bought coupons? How many people went to other sites from your sites?
3) What amount of money did you spend? On what areas? What amount of money did you make? From what sources? *
You say that you didn't listen to your customers. My point would be that you didn't realize that you were making something FOR THEM and not for you.
You should consider thinking from your customers' perspective.
They really don't care about some of the things that you think are successes i.e. using hosted services and learning Ruby and the site being BEAUTIFUL because you think a site being beautiful is important to you personally.
Unless Indianapolis is 99% users of HackerNews.
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You say that you were shocked that small business owners don't track things - yet you write this post without giving any figures. Which makes a great post meaningless because we don't know what 'You had no skin in the game' means.
Did you spend 40 hours a week after doing your day job? Did you do that for 3 full years? Did you put in $100K of your own savings?
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Finally, you went into a space where you had very few competitive advantages - not the first mover, not the best product, not the most money, not the most resources, no brand recognition.
If you had tried a niche within coupons or a new area you might well have seen much better results.
Also, you don't mention anywhere how much total time and effort you spent on this which makes it difficult to know whether your lessons are worthwhile or not.
If you spent 10 hours a week for 6 months - then obviously all your 'learning' is probably useless.
If you spent 40 hours a week for 2 years - then it's very valuable stuff.
which one is it?
I have (almost) all the numbers. I can tell you what I spent, to the dollar. I can tell you about the traffic to the site, what they did, what was successful and what wasn't. I can't tell you how much time I spent on it because it varied so drastically over the past year. It ranged from 10 hours a week to 0 hours a week. It just depended on how busy things were at work and with the fam. (EDIT: my wife tells me it was more than 10 hours a week. ;) )
The point of the post wasn't to give detailed numbers, but just to generally convey what I took away from it. Whether or not you know my numbers doesn't change what I learned. And just because I didn't mention it in the post doesn't mean I don't have it, that is a large assumption. I'm not sure how it makes the post meaningless. Perhaps you can't tell if you can trust it or not because you can't measure it? But even if there were numbers, that doesn't tell you whether you can trust it any more or less, so perhaps that's not it.
I wrote the retrospective post about the things I care about, not the things my customers cared about. You're absolutely right that almost all the stuff I listed is meaningless to my customers, and I never even mentioned it to them -- they don't care! :)
Also, I didn't go into it in the post (I was going for something shorter and readable/consumable) but I had two customers. Small businesses listing coupons, and people using the site looking for coupons. I thought about it from both perspectives every moment I worked on it. I geeked out about how I was doing it, but never lost sight of my customers. Sorry if that wasn't clear in the post.
You're also absolutely right that it was a poor choice of spaces. That was a huge lesson I learned. :)
So to summarize, take it for what you think it's worth. There's no law that says you have to read my lessons learned and apply them. But they are lessons I learned, regardless. Thx for reading!
1) Firstly, that you were in business to add value to customers and that was the primary motivation. It seems your primary motivation was to learn/experience it. Which is fine - it's just not what I assumed it was.
As Zig Ziglar would put it - To get everything you desire in life you just have to give enough other people what they want from life.
* Who knows what approach works better. For me, the Zig Ziglar approach has worked much better but that's a sample size of 1 person.
2) Secondly, my mistake in assuming your post was meant to help other people. If you could have added a note that it was meant mostly as a catharsis and written for yourself.
Then I wouldn't have assumed that there might be a lot of value for me.
Right now the value is in seeing a few things but the amount of effort is just not enough to actually know whether any of your mistakes other than not putting in enough work matter.
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See, the key thing is your line on work being from 0 to 10 hours per week with some weeks being over 10 weeks.
How can you know your ideas and business were right or wrong with that amount of time?
For entirely selfish reasons (to help myself) I wanted to learn from your experience. However, if your experience is based on working an average of 10 hours a week, then it doesn't really say anything about what the market opportunity really is/was.
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On a related note there seems to be a fascination on hacker news lately on apps done in 5 days and 'passive income' and how to succeed without working hard.
Are there any people there who are succeeding after working really hard? Who are spending 5 months on their app and not 5 days?
But you did nail item #1 - I was primarily interested in learning/experiencing, and secondarily interested in adding value. That's one of the reasons I lost motivation and shut down the site, it is extraordinarily difficult for coupons/discounts to add value to businesses across the spectrum of business. Some businesses it works great for, many it doesn't. It was when I had that realization that I decided to end it.
I did spend time (sorry, probably not "much time") brainstorming business ideas that actually would add value to the businesses I knew, and I think some of those ideas are good, but just not feasible for me to do alone, so I'm not even pursuing them either.
I have a friend that has spent _years_ and tons of his own money working on his startup, and it's still struggling to succeed. I learned a lot from him as he was my mentor through this process. I hope his endeavor takes off, but it's a long road, and he has worked incredibly hard. I can connect the two of you if you actually want to talk to someone like that.
My suggestion to you would be to consider whether you can put in more effort into your next startup.
We each have our own beliefs on what works and then there's reality. So there's probably a chance that there is something that works very well but both of us would have to look at things from a different perspective.
For me I tend to believe that you can't really succeed unless you're 100% in it. That having a family pretty much rules out having a successful start-up. That's obviously not true as there are exceptions. Perhaps lots of them.
I think in the end it comes down to not giving up. However, again, that's just a belief and who knows what the reality is.
Thanks for offering to connect me to your friend. Not interested at the moment as I'm quite overwhelmed and already places like Hacker News are putting too much of the possibility of failure into my head.
My attitude is that failure isn't really possible and it's working amazingly well so perhaps I should only read posts that are very positive like the Yoghurt business one.
The whole idea of failing fast is that you don't need to invest pointless time after you have learned something is not going to work.
"10,000 hours to expert" is a different idea. Here, the idea is that to become an expert in a specific skill, you have to put in 10,000 hours of 'deliberate' practice.
These are two different kinds of learning. The '10,000' hours approach is not the kind of learning you need or want to do to determine the validity of one business idea. In this case, time invested is not necessarily correlated with learning.
I'd rather learn from the experience of someone who became an absolute master. Because the lessons of absolute mastery apply across fields.
Who cares about the top 10%? The top 10% isn't worth wasting your time on. Especially if it means you spend 6 months each on 20 different areas and become top 10% in 20 areas.
Much better to find 1 or 2 areas you absolutely love and become top 1%.
Top 1% - Going to the Olympics. Top 10% - Impress your friends.
Take driving for example. When I started driving I enrolled in a driving course for several months. Now it's debatable that this course put me in the top 10% but it probably helped to put me above average. I have no ambition to be a race-car or stunt car driver so this is a great trade-off. I believe I'm a safer driver because of it.
Negotiating would be another example. It would make a lot of sense for a lot of people to take a negotiating course or read and practice it for a few months to get good at it in order to be able to negotiate their salary. The payoff of just a few months work could result in tens of thousands of dollars over your whole career. It wouldn't really be beneficial to spend 5-10 years getting your negotiating skills to the top 1% unless you wanted to actually do that for work.
Also the 10,000 hours really depends on if you are actually progressing or not. I think it's pretty debatable whether merely 10,000 hours of driving would put you in the top 1%. It's like the old joke that some people with 20 years of experience actually have one year of experience repeated 20 times.
Yes, you can't be great at everything but I think it's more valuable to great at one thing and good at a lot of things rather than just great at one or two things and mediocre at everything else.
Basically my point is, strive to be in the top 1% for what you want to earn money at or do with your life and then be in the top 10% for other things that either help you with that or benefit you in some way.