Startup failure stories: 20 months in, 2K hours spent and 200K € lost (2021)
dsebastien.net
dsebastien.net
But I take exception to the "200K EUR" part. Money you didn't make is not the same as money you spent. For starters, the former is infinite!
That the author is so concerned with this opportunity cost -- a cost that is radically different for different people, dependent largely on circumstances that have nothing to do with their value to the startup -- is, I guess, part of the self-doubt he describes.
I can relate, I did a failed startup when I was younger and many times I thought about whether I should just suck it up and get a job instead. Probably everybody does. But half the point of it was to not be doing the thing that would have given you the 200K.
Cost is short for opportunity cost. If you have a high probability of earning 200K EUR as your second best option, then what you choose to do does incur that cost.
Young people not accounting for their costs properly is an especially big problem in the US when they decide to spend time in their valuable 20s going deep into debt pursuing higher education with low probabilities of ending up with high pay (assuming their goal is high pay and/or some sort of financial security). They should be adding up all the lost pay and compounded returns from their savings, because their eventual pay needs to be sufficiently high to make up for it.
And it is not just money. Opportunity cost also includes quality of life, for example, slaving away the best years of your life working for someone else (or one's self) should have an acceptable probability of netting you something commensurate to the sacrifice.
They didn't spend both 2000 hours and 200k worth of hours.
>> the project needed to be (almost) re-created from scratch
>> the build system, Docker/docker-compose, continuous integration, authentication, internationalization, etc
>> created a wiki, migrated the code to a monorepo, created/cleaned up the backlog, etc.
>> created a story map, devised a roadmap, and clarified the scope of the MVP
>> replaced Angular Material by Tailwind, created our own theme, refactored the data model
> This is why. A year went by and no product work was done, none of this was necessary. The very first thing that should have been built is a MVP, that main screen that was only tackled 9 months in. Strongly recommend studying “The Lean Startup” and learning how to be stoic about tech. That’s how people deliver working products in three months.
in addition to that, the author mentions, still in a Startup/MVP context:
"The focus on took care of release automation, created the production infrastructure (switched to Kubernetes)", "The NoSQL database was making us lose a ton of time".
None of this should matter at MVP stage!
I think it's really good advice for developers wanting to launch their own project to do at least one or two tiny projects first and try to release and sell them. It makes you much more aggressive with cutting fat at an early stage.
It was an enjoyable read though and I imagine the author learned a whole lot regardless of the outcome.
An MVP for a web sass should be "core UI/UX value prop" for the main selling point (s) and what I call "marketing brutalism" for the rest.
With the most boring and reduced use cases you can convince everyone else involved to agree to.
https://thedecisionlab.com/biases/bikeshedding
Instead of tackling the hard problem (creating a "meeting screen" that actually delivers end user-value) the author tackled the easy problem (setting up infrastructure and documentation).
The illusion of progress is hard to to give up.
That is as if to say "I've gone to the music school, why am I not a k-pop mega star yet?"
A lot of people will not look at the 200k this person didn't make as "lost"; rather the cost of learning expensive lessons.
The first lesson should have been that we're not in 2007 anymore. Sprinkling tech on random things has a small chance of working out. They did not have any domain knowledge or connections to schools nor restaurants. They were just users of them, like everybody else.
Building a startup is a beautiful thing but it requires relentless optimism and actually feeling the problem. Enough to say that's how YC finds its cohort.
Granted I've done the same thing 5 times now, but never again.
Should have mocked up a bare UI in a week, then tried to sell it for a month or two.....
How do you sell a mockup? Are you upfront with the potential clients about the product not existing and the timeline?
I imagine people would have a hard time buying a promise but that's probably because my sales skills suck.
You’re going to have a tough time finding a good sales partner if you assume them to be dishonest. Liars aren’t generally good salespeople.
It might be tough because most won't enjoy hearing it, but marketing is 100% lies. It is frankly dishonest to pretend otherwise.
You can say you don’t have the skills to sell something, but framing sales as something that is inherently dishonest or a misdirection shows you have a misconception of what sales ultimately is.
Could have probably worded my initial comment better.
I guess I just lost something like $20 reading the article then.
Don't scoff at the person who works a relatively ordinary corporate job but manages to accumulate a respectable wealth over a decade or two. There are countless startup bros who go through a dozen failed attempts in the mean time with nothing but experience to show for it. That experience may be useful at some point in the future, but it's entirely unrealized value. On the other hand, having 500k wealth to your name which is invested and growing is tangible value right now which itself can be used to fund future endeavors.
I'm the author, and I would definitely have made that money had I continued to work as a consultant. I had secured a high paying long term contract and I broke it to work on that project.
Money in the bank is money that I could have invested, money that could have improved my family's quality of life, ...
But the impact is not the same when you're nearly 40 or only 20 :p Those were costly lessons to learn.
Many thanks!
- if one wants to experiment and learn new tech or approaches one should not leave the job and create maybe some side experiments
- I can see why people would just leave the fleet if there is not a steady path forward towards an mvp
- we have project managers around with the capability to manage plan and prioritise projects of a chair? As a dev is frustrating
One either win or learn
Reason being, it is easier to work two remote jobs simultaneously than it is to build a successful startup. It is also far more enjoyable and calls on your direct expertise instead of requiring many skills, some of which you may not do well at all.
Given that two developer jobs will have you clearing at least $300-400k in income per year, this is a sobering heuristic of how successful you have to be at building a startup to consider it being worthwhile.
If the author was working two jobs instead of doing this failed startup, after 20 months he would have roughly $600k+ in earned income to show for it, instead of a ~$200k loss.
For instance, you can easily go through years 1-4 making 1/2 your income. But all of sudden in years 5-6, you gain more credibility, your product starts to achieve PMF, word of mouth takes over, etc. And maybe in years 7-8, you attract a big company that buys your company, and all of a sudden you just earned the equivalent of 25 years of a salary.
http://reactionwheel.net/2019/01/schumpeter-on-strategy.html
TBH I'm not sure what to even say about the idea of doing two full-time jobs simultaneously. I definitely wouldn't have time for that with my current contributions, and would feel betrayed if any my colleagues did that. I'm pretty sure I would snitch to management if I found out.
I wrote this article at the beginning of 2021, a few months before I called it a day and stopped wasting time on that project.
I submitted it to HN at the time and there were tons of useful feedback: https://news.ycombinator.com/item?id=25627081
If you're curious, I also posted two follow-ups: - https://dsebastien.net/blog/2021-02-28-21-months-in-and-80k-... - https://newsletter.dsebastien.net/issues/developassion-s-new...
In summary, I would say that I was way too trusting. I found a startup coach who lured me into the project, and I was super naive. I had doubts along the way but continued playing the game hoping for a happy ending. There was none. I was embarked with a super confident but ultimately hollow CEO, and I was way too focused on the technology.
I really did a good job with architecture, code quality, etc., but failed to avoid bike shedding for the longest time. Furthermore, I had no experience with startups, hoped that my co-founders really had a portfolio we could sell to and thus could focus on delivering high quality, even if it took longer. In reality, there was nothing but daydreaming and envy.
My co-founder dreamt about the Silicon Valley and VC money, but wasn't ready to actually deliver and sell a product.
My co-founders also refused to go and discuss with those potential customers for the longest time, and by the time they did, I had run out of money, was super stressed and couldn't go on much longer. Worse yet, those prospects of course had important requests, and we didn't have the energy left to implement those.
And when that realization came, my co-founder just quit silently. From one day to the next, there was not a word, not a gesture. He went offline, and I never heard from him since. I was a tool.
I made a conscious choice to invest that time and money, but could certainly have made a lot more money elsewhere, hence the title. But I managed to protect my family from harm. I went back half-time as an employee and continued to pay rent and put food on the table. So no harm done in that sense.
And it wasn't useless. I learned a ton about myself, about how to actually go about and build something. I learned to recognize bike shedding and to be less naive.
The most frustrating part for me is the fact that all this production-ready code is just rotting in place. And there's not much I can do about it...
… to do a start-up that’s all about meetings <golf-clap>
Plus I did not work in the corporate world anymore. I was standing aside, working on my own terms.