The side hustle from hell
blog.jacobstechtavern.com
blog.jacobstechtavern.com
If you thought the idea was great, there was an obvious golden opportunity for you, none of the people there are going to make this into a product, but you can. If the idea was bad, getting paid in equity means getting paid in something worthless.
The only situation where it is reasonable to deal with such a totally defunct organization is if they pay you a lot of money. And if there is a single missed payment you stop any work until you are paid.
I could talk anybody to death with all of my ideas. I only get to work on very few of them. I can’t imagine how sad a life it would be to only have one. It’s great for mentoring though because there’s always something shiny on the shelf and I can let them window shop for one they like.
In fact I'd bet it's at least a coin-flip that this profile would actually be more effective than a hardcore CS background engineer who hasn't ever managed teams or launched and sold a product.
Of course that's a small caveat, since that's almost never what we're talking about, like in this example. But still, seems worth noting that the outsourcing of the build isn't necessarily the red flag, the red flag is the leader of the project having no experience in building and launching useful software.
> non-technical founders who failed to even outsource their project
I got lucky, and spent only a few months while not working that hard.
But at the same time, this quote hits home:
>I was doing a startup. I was executing, and for the first time in my professional life I wasn’t insulated from the results. I didn’t achieve my destiny of great things, but I’d built something.
My whole career was jumpstarted by my second startup (we only got to preseed but it was a great two years) and there's no way I'd have been as good a fit without this experience
>> I hope that by reading this story, I can protect some of you from 11 months of pain.
That's not how experience works. What you really did was get an 11 month business education. And again, you can tell your story, but you can't pass on that education.
I'm glad you moved on to better things. And I think you're saying that this experience prepared you for that, and you were a better overall entrepreneur because of it.
Thats how experience works.
You could have taken Gus' dad's advice - and you'd have saved some lot of time, but equally missed out on so much learning.
Look, most opportunities are bad, or at the very least risky. But if you wanted safe and secure you can just go get a job. Some risks are worth taking on, even if they look risky, and even if they fail.
Experience helps you at least identify the risk. Both in product and in people. Some products will just never work (), some people aren't worth working with.
() your mechanic program was likely doomed because "that's not how cars work". I was never going to be a customer because I have a mechanic who's been looking after my cars for 30 years. He always seems to have cars to work on, do I guess he's not a customer either. If I buy a car new it comes with a service plan, so I'm out that loop.
In other words I suspect your app solved a problem that's only a problem to fresh grads with their first car. And they just ask their mates, or their dad.
As you discovered you can't feature your way out of the "no market" problem. You discovered that finding a market is more important than building a product. All excellent lessons.
Which is to say that yes, we can learn from the mistakes of powers, and the story is worth telling.
For 99% of people, who want safety and security, they'll just ho get a job anyway. For the 1% who want to start something new, well 4 in 5 will fail either 5 years. Those failures are the experience needed to find success. Some get there quicker, some abandon good ideas too quickly or bad ideas too slowly.
That's how we learn along the way, and yes, absorb the lessons of others.
What surprised me the most, was that I did not improve much technically, as we chose well known technologies to get the job done. Focusing on product over tech was one of the best decisions we made.I also learned to make compromises and accept some technical debt in order to get the product out in time. You get a much deeper view of the business needs when you work in a smaller group.
If I find another startup whose product is an app, and they can't find a local developer to write that app, I'm running. Why outsource your core product!?
So all he would tell me is that it was “the next Twitter”, and from what I could gather, he would retain the majority of the equity and I would do all of the work, while he lobbed ideas at me from on high.
I passed on it, but only because the red flags were extremely obvious. I could certainly see a situation where I might have been sucked into something more subtly exploitative.
But if someone wants you to sign an NDA just to hear about their idea or business, or as a condition of being interviewed for a job, ALWAYS say no. VCs don't sign NDAs and neither should you. It's plain and simple uncompensated risk.
https://blog.jpl-consulting.com/2012/04/why-i-wont-sign-your...
https://www.markwelchblog.com/2009/08/26/why-i-dont-sign-nda...
As soon as someone hears what I do, and that I’m retired, and doing it for the fun, I hear cha-ching! in the background, somewhere, and their eyes light up.
But yeah, we’re a dime a dozen.
It reads like a parody but it was serious.
There are of course some fantastic startups launched out of the UK and Europe. Spotify, Deepmind and Raspberry Pi come to mind. But, as a rule on the investment side, I'm always super skeptical. Inevitably cap tables are worse, investors have a very different view of their roles than they do in US or Asia, and there's so much less startup infrastructure than in SV or say Singapore or Shanghai that it's a very different world. Ironically, it's self-feeding -- investors think startups are shitty business, they charge more, high quality founders head for greener pastures -- rinse and repeat.
Success stories I’ve seen always involved extremely active customer. They become part of the team, helping devs to build good product. Also it always took much more time and money. If you think you can build marketable product with fix-cost-scope contract - think twice.
That's good advice to not lose your HEAD.
2 sided markets get started by buying one side of the market. This is why this model is very expensive to bootstrap. You typically start by offering free or very discounted services to the consumers and pay the difference to the producers until you have captured the consumers and the producers pay you for transactions. All the while you have to mitigate disintermediation, so that producers can't bypass you to access the consumers outside of your market platform.
My motto is “FYPM”: https://youtu.be/3XGAmPRxV48?si=zSXRVQibvli1QTk1
Cash not illiquid equity at my market rate:
“You’re getting in on the ground floor of something huge.”
“We can’t offer big salaries yet, but the upside potential is enormous.”
“You’ll have massive impact here — way more than at a big company.”
“We’re looking for people who are mission-driven, not just here for the money.”
“Everyone is making sacrifices right now.”
“Once we close the next funding round, we’ll revisit compensation.”
“The real reward is in the equity, not the salary.”
At the other end of my career and looking back it becomes possible to see things that you missed on the journey, the role of luck, the difference between talking hard and working hard, and the critical importance of the people involved. A million monkeys with a million typewriters won't eventually create Shakespeare's works, they will waste a lot of resources and create a bunch trash. I also discovered that there are people who, when they speak, you really want to believe what they are saying. Being able to step back and say "what's the foundation here? Why should I believe this?" can be very difficult.
The problem is selection bias. A startup is 3 monkeys tops, so the chances of that are appropriately low and if the product looks dumb and unconvincing, it probably is ("...but they also laughed at Bozo the Clown.")
I don't think the founder realised how lucky they were to have this combination of people, as this was their first startup after years in enterprise sales. There were other competitors that started around the same time as us, but they failed to deliver. I don't think we were necessarily better at developing, sales or marketing individually, but as a team we were able to work together really well.
When the founder raised a significant amount of money, they decided it was time to scale up and become a "real" company with proper hierarchy, reporting lines and processes. They hired people from FAANG who had impressive resumes, but were more concerned with titles and proving themselves. Constant rewrites, re-orgs and workshops to improve working processes made sure that progress halted, and most of the original team left. Today, the product is still alive as a minor actor, but they lost a lot of momentum and the competitors had time to launch their own "cloud" products.
It was painful at the time, but now I look back and I see it as an important lesson.
- 3 non-technical cofounders
- Flurry of activity for everything other than acquiring customers
- Attempt to outsource development followed by disappointment
- Relentless scope creep
- Zero go to market plan, just an incessant belief that more features in the app will solve all problems
There is also one less obvious point that is buried in the article:
> Simultaneously, my underpaid mid-level consultancy role passed me up for promotion again. I wanted out, double-time.
I did volunteer mentoring for a while. Few people went all-in on unpaid startup jobs as their primary role, but many were tempted to do it as side projects. They always believe it’s less risky. The risk they don’t see is that it distracts them from their main job, either slowing career growth or risking a PIP or layoff.
The common thread I kept coming back to was this: Ignore the side projects. Focus on career growth at your day job. Put your primary energy into growing your career or finding a job where you can.
Something about the side hustle continues to lure people into thinking it’s a way out, until they burn themselves out and sabotage their day job while doing it.
The only exception were juniors who could rise to a senior. But senior to staff, or whatever you want to call it is almost unheard of unless you jump ship.
That said, I have only moved jobs 2x in 9 years (my second startup failing doesn't count)
The article mentions being an early career junior in the first few sentences.
Many of these promotions were out of cycle (because there was no cycle) and now that I’m at a bigger company I see how this would be much more difficult. There seems to be little interest in really retaining and growing engineering talent and all promotions are at the mercy of an entrenched HR org that doesn’t understand the work that anyone is doing. On top of that budgets are generally much tighter now than I’ve ever seen during my career.
It may still be possible to do this at smaller companies, with the obvious caveat that there’s always the danger of title inflation, though now that I’m at a bigger company I feel like I see more title inflation around me than I ever did at the smaller company. There are also entrenched structures of power that are obviously working against the success of the company and are causing good people to leave.
I do wonder if more companies embraced promotions it would lead to a healthier organizational culture in general since you’d have more people around who were involved in creating it.
Familiarity begets being taken for granted, and undervaluation, which hurts one's promotion case.
Unpaid job is an oxymoron. If they can't or won't pay you, it's either volunteer work, or a hobby. Why do charity work for a business that thinks it's going to be big; there's plenty of funding out there, let them find it and then they can pay you, and you can do work for them.
If you want to do an hour or a day or maybe even a week of work for free, ok. Maybe that's fun and interesting and you get something out of that, but after that if you're not getting anything, why would you keep doing it?
https://news.ycombinator.com/item?id=24285305
(edit: totally fine to still jump into a startup role if you're not optimizing for quality of life and economics; I did because I enjoyed the work and the team)
Edit: just realised that made it sound like she died. She’s fine! We just had baby #2! But we could have spent lockdown making bread and playing RuneScape instead of me grinding
And even then, I had a few friends that had to go for another few months of unpaid job (not internship) later on. Because nobody would hire them without experience, and some companies don't consider internship to be one.
Side projects help finding a better job, or at the very least work on getting certifications or self-development to find a better job.
Having a physical business and operating it on PTO and weekends is the cleanest way to keep it separate from work.
The tech side hustle mistake is to get a tech job, then think you'll do some more tech work as a side hustle. Some people can keep a clean separation, but more commonly people slide into blurring the lines between day job and side job. Trying to build a startup MVP while working a consulting job is basically doing two tech jobs at the same time, with predictable outcomes for both.
In 16 years on HN this is one of the best pieces of startup advice I've seen.
Default should be 10% of time on MVP and landing page, 90% on distribution until you smell PMF.
Fight violently against any suggestion you invest more heavily in product until somebody is in tears about keeping up with demand for your MVP.
Sample size of 1
- Side hustle #1 funded my toy habit for a long time and gave me the confidence "I can build & support something from start to finish".
- Got to C Level working for 'the man' (aka the board). But regardless of level you're never in control of your destiny, especially with the eventuality of PE. For some that's okay, for others that's not...
- Which lead to Side Hustle #2. Left my day job 3 years ago....
Now have some of the best in our wee niche using our product, a number of team members, gradually growing it in bootstrapped fashion.
No investors, no funding rounds, no chasing growth targets. As "pure" as it can get - adding features, capturing more market, getting positive word of mouth, picking up new countries, finding new edge cases, adding new package upgrades. I think we're around 40% of new clients are referrals/word of mouth.....
In the first 6 months of turning billing on you're going "what the heck am I doing...." now I'm "oh I wouldn't give this up..." immensely rewarding bringing other new people into the business, and seeing that flow through to the finished product for our clients.
At least in NZ, side hustles are the genesis of a lot of tech companies.
> Something about the side hustle continues to lure people into thinking it’s a way out, until they burn themselves out and sabotage their day job while doing it.
Side projects are a way to assert control. The siren song is that you can build your own way out of corporate hell and have a shot at growth (be that financial/personal/etc) without needing 10 randos and 3 committee meetings from your company to sign off on a promotion. In that light, I think it is a very reasonable response.
I think it's a symptom of how crappy and ambiguous leveling feels over the long-term. You're told that nothing's definite, just work hard and deliver results, and you'll make it.
Oh my... I concur. I've been in the very exact same stupid play about 10 years ago. 3 cofounders, not one to understand tech, 1 hired me as a consultant, then invited me with a few shares and a salaried CTO role to build the solution, and it's been the exact same scenario.
Do not, ever, associate (figuratively or contractually) yourself with people you wouldn't go hiking with in the wild for one full week, and coming back from it craving for the next time.
Even if you can't stand being in the same car for one hour, don't work with them at all.
I'm in tears reading this, I've never seen it worded so perfectly. Have we all experienced that founder who has zero vision for what they're building and is so brutally relentless with ancillary asks?
Sometimes you just need to make your own mistakes to learn, even if you read / hear from others that you shouldn't do that thing.
C'est la vie.
They're investing in people, not some singular half-baked idea that very likely goes nowhere.
In this case it sounds like both the idea was bad, and the team was bad.
This is one of the best use cases for LLMs by the way - they can often explain contracts to you, or find flaws in contracts. Try pasting one of those long-winded click-through contracts from Apple etc. into any LLM and see if they can help you decipher the terms - then do this with your startup's hiring contract. Also, watch 'The Social Network' and pay attention to things like stock-split clauses and so on.
Some claim the world is split between those who understand compound interest and those who don't but I think it's understanding contract law that matters more.
> but I think it's understanding contract law that matters more
It's best to just pay a real attorney instead of trying to learn something from a TV show or fact-check the hallucinations of an LLM.
I've even worked at bigger places with very scummy equity contracts, like a lawyer drafted it specifically to obfuscate how badly it was screwing you over. Not there anymore lol.
I respectfully disagree. Just hire a lawyer. You don’t want your understanding of your contract colored by the opinions of an LLM. The lawyer carries liability insurance if he gives you bad advice. If you don’t have a few hundred dollars to spend on independent legal advice, you might want to reconsider if you are in a position to be starting a business in the first place. The amount of money you could potentially save is nothing compared to what it could cost you in the future if something goes wrong.
There might be great value in LLMs fine-tuned to deal with contractual law, regulatory law, and legislative interpretative dance. At present I'd be sure to run the legal contract through multiple different LLMS at the very least, and analyzing it paragraph by paragraph in debate club manner (LLM A: tell me why this is a good contract, LLM B: tell me why this is a bad contract, LLM C: analyze the flaws in the arguments of LLM A and LLM B, etc.) Doesn't replace a good contract law specialist human, certainly, but at least you can then talk to your lawyer in a semi-informed manner.
LLMs are like compilers in that unqualified faith in their initial output is never a good idea.
The reason the company existed is the rich founder was upset that a shop wanted to charge him a fortune to get his BMW M5 repaired. He wanted better quotes. So we built a marketplace to get better quotes. But that's not what real customers want (because most people have Toyotas not M5s). And also we didn't do the customer development / research to understand how repair shops work. You want to know how my repair shop manages their repair schedule? They have a paper calendar and write down your phone number and the job. sure there are better ways to manage the work - but this paper mechanism has worked for them for years and why change it? And you know what - I go back to the shop all the time because I trust them. Ultimately people tend to have a fairly personal relationship with their local mechanic. You can build a leadgen product but the ultimate relationship is between the customer and the repair provider.
TLDR - everyone should understand the lean startup. /working backwards model and relentlessly focus on the customer.
This is the money line. And it goes for all skilled trade work. Mechanics, plumbers, building contractors, roofers. Most of the people doing this work are just surprisingly bad at it, especially for how much they charge for it. It takes a LOT of time and effort to find someone good. I'd even lump doctors and dentists into this.
I don't want a marketplace to tell me who's the cheapest, I want a marketplace to tell me who's the best. And unfortunately there's no way to build that. (Why is a long story, but the short version is: because there's no way to build the correct incentives into it.)
A friend quotes a sometime co-worker of his: This is C+ world, and if you can do a solid B- you won't starve.
Invented a few things, implemented in product, CEO & CFO sold company from under us. Ended up with nothing.
I can make it funnier!
Bitches, owning something is doing the hard part !
Don't you remember before inflation when we were able to focus on climate change!
But you totally got us there, the startup failed because we were a vitamin (and because our on-the-fence seed round was scuppered by Putin cooling some feet)
Only way it can work is if you can bootstrap something hyperlocal to start with (think Uber in San Fran)
I wonder how many outsourcing firms are going to be replaced by vibe coding. This response is pretty on par with many of the horror stories responses I've seen over the decades...
MY MAN!
"The guy whipped out a rudimentary financial model in a few hours. Turns out it’s not that important—it’s for illustrating your runway and spending plan, not to justify an imaginary revenue number."
That gave me enough info to know I'd prefer working for a big company
Get the fuck outta here. I couldn't read past that. I'm done. Thanks for the writeup. Godspeed.
Even companies that had staff of developers would often outsource work that should be part of their core competency. Without fail, every time, they ended up with a bill ~an order of magnitude higher than they'd pay if they were just hiring competent staff to deliver the project.
In many of these cases, these same firms would then hire another (lower quality) company to maintain it for them. This typically went as expected.
I could never understand the rationale for a lot of these cases.
"The existing staff is busy"--but they could have two hours of meetings with us daily?
"They don't have competence in those areas"--they're already using $CLOUD and $THAT_STUFF? It often was working with existing systems?
"Costs"--again, see above.
I really could not understand the motivation. I get it for clients that had no experience in what we were sent to do or got sold on something they didn't need, but a majority surely had or could get the resources to do the projects that were done, but opted not to, for whatever reason.
I've seen this kind of thing fail on many occasions.
If it's critical for your business, (ya know, not some LLM demo or something), you need ownership, otherwise you end up with a far larger cost of ownership and piles of logistical and quality problems.
I genuinely can't imagine a start-up doing this. Everything I've seen is private sector companies, most ~competent companies.
I'll say this, the cases where I have seen success in consulting (from the perspective of the 'buyer' is those that were intimately involved with the process from the start, providing feedback and pushing back when needed and taking initiative deliberately to "on board" so they could maintain and use whatever it was they got, and typically working alongside consultants)
You also have to basically avoid most consulting companies. I won't name them, but it's not hard to guess.