My Startup Failed. Fuck.
nemrow.tumblr.com
nemrow.tumblr.com
I wonder how many other business have adopted that strategy (of ignoring initial reduced interest in your startup) to only find glory and success down the line.
Either way you failed but you should be commended for it.
I do wonder (gently) if there's something like cargo-cult avoidance though? "These people didn't do this thing, and they failed, so we have to do it."
That's glib. There is a very, very difficult balancing act between trusting your innermost convictions and learning to doubt said convictions frequently, as an exercise which reinforces the good bits and dispels the nonsense within them. Failure is the most valuable when you fail at something you personally believe in, because you're forced to confront yourself in the failing. Failure because you followed some BS system for doing or creating a thing without using your own thought processes along the way might teach you to stop being such an idiot, but usually it takes many failures of that sort before the message seeps in.
My first startup attempt was a coaching marketplace and community for poker players. My co-founder and I were both successful professional poker players and coaches at the time, but we were young (20ish) and all but clueless about technology. I still think the market opportunity was there, but we hired an agency who outsourced everything, made bad tech choices, took forever, and gave us a fraction of what we originally agreed on. I learned to program myself in order to complete a major component of the site (in flash) which they had just completely botched.
What we ended up with wasn't terrible, but it fell way short of the vision we had, and our marketing efforts fell mostly flat as well. We were able to recruit a few smart people to post and discuss hands here and there, and we wrote a few articles ourselves that showcased the flash hand analysis tool I had built (the best functioning aspect of the site), but we weren't getting any other traffic. There were a few bugs and an assortment of minor ux issues which made the site feel a bit clunky, and people's feedback was pretty unenthusiastic, so all in all we weren't feeling very good about the direction of things. It didn't take very long (maybe six weeks or so) before we threw in the towel.
It wasn't a complete failure--after all, I had learned how to program and discovered that I quite liked it (certainly much more than grinding poker online), and both of us had learned a lot of lessons about business and technology. But there was another lesson that we only discovered with time.
Even after we completely abandoned the site and it went dormant, I would still check google analytics from time to time to see if there was any traffic, and an interesting trend started to emerge: a few of the hand posts and articles we had posted were developing really steady search traffic. One article in particular was generating something like 20 uniques per day.
At that point, we were both just done with the whole endeavor and had no motivation to try to pick it up again, but we realized that if we had kept at it and continued to create more and more quality content, that we probably could have had an seo goldmine on our hands, developed reputations as poker strategy bloggers, and leveraged that into the community we had originally envisioned. Who knows if it would have gone that way, but it seems like there was at least a relatively unobstructed path to success available to us if we had been willing to stick it out and let the long tail kick in.
You have to be stubborn enough to succeed in a world where the majority of people will tell you you're going to fail, you have to ignore all that.
Often times however, you do fail.
Almost anything worth doing is difficult and to an extent risky. You are likely to fail both wasting time, money and other resources. But you are also likely to win big.
Anything that is easy is either already solved, or leads to mediocrity or pays too less.
To succeed at your goal you either need to get lucky or simply persist until you get there. Some can, many can't. Some just get lucky.
No, it does not. Since, statistically, most startups fail, it's is mathematically sound to assume that mostly failure lurks inside failure.
At some point you have to stop and do something else. Even if you've lost money and time, it's wiser to quit and do other stuff, than continue to losing money and time in the same endless sink.
It's like the demotivator for "Mistakes", this is probably best as a cautionary tail for people that have a startup itch, but don't necessarily have the necessary skills yet. I mean, this really talked about business and technology problems, but even assume they hit lighting in a bottle with the business model and didn't run into the technical issues, does it sounds like they would have been able to capitalize on it? I got a feeling that it was organized in an ad hoc way, and they weren't set up as an llc/s-corp/etc, had equity agreements, or basic contracts (otherwise, how did the one artist change not know they terms of the business, or opt out so quickly?) I feel like they would have ended up in trouble with the IRS, in a lawsuit with each other, or getting screwed by a less than scrupulous VC.
That said, everyone is better off from sharing, and I thank the author for it.
Based on the blog, I get the sense that the founders are in their early twenties. At that age, no one is "ready" for a startup.
I doubt that Mark Zuckerberg, Steve Jobs, etc. were ready to start their company.
At that age, you just do it, since the risks are low.
Unless your parents are wealthy or you have access to a lot of money, at that age its unlikely that a lot of money is on the line. Sure, they "wasted" time on this startup but this is valuable for the next company they will build.
Also, if there was a lot of money involved (and it wasn't their's) its likely that the business would not have gone as far as stakeholders would have wanted validation.
I mean, it's clear to me that their startup failed. But "nowhere near ready to found a startup"? What does that even mean? Where do I get my secret decoder badge of startup readiness exactly?
Reading through it, I saw and empathized with their mistakes--they decided they'd found validation before they really had. They kept it going too long. They ignored the writing on the wall for too long. But aren't those always the tough questions? When should a founder give up versus persevere? It's not a straightforward answer and as a business owner I find it frustrating when I see people (particularly other business owners) suggest it is.
Bottom line though--everyone needs to decide for themselves if they want to go into business for themselves. But are they "ready"? Who the hell knows? There isn't a list of required skills and credentials for this position.
When I was a young kid, I had an idea that I was going to have a plant store (really. I had just learned about splitting African violets) that would have 'low price days' and 'high price days'. I swear. They idea was that people would be so grateful for the low price days that they would go to the high price days to help keep the place in business. This would have been an idiotic company.
You ask when the authors of the blog post should have given up vs persevere? I would say either when the drew up the business plan or after the beta when the found that people didn't like their product and that they couldn't execute on their idea.
I'm unromantic on this point. To me a startup is to make money (as a profitable business or on the exit), not find creative outlet or have a life experience. I'd rather see 20-somethings blow the ~$5K spent on EC2 hosting apps with fundamentally broken business models instead on (AirBnB) trips through Europe or South America and getting a little bit interesting as people first.
It's up to them, but (to avenger123's point) almost nobody is a Jobs, a Zuckerberg, or a Musk. Most startups fail. Plenty of YC class startups fail, and they're the winners of a highly selective process with access to unbelievable connections.
So my point is this: if someone is not a rockstar and they don't already have these skills, they can learn a huge amount by joining small companies in their C or D rounds (ie, corporate-ish) and practice those skills by applying them in a structure where it's likely they have more experience coworkers to learn from. Then they can found a startup when they have the tools and an idea they're passionate about.
If a person can "get addicted to a steady income" then their financial planning sucks or they aren't committed enough. Better off they don't bother and waste time and capital that could go to people that give a damn.
I decided to start a Twitter profile to collect all these post-mortems in one place. If such a resource already exists, let me know!
Remember the famous maxim: "I failed a thousand times but each one brought me a step closer to stealing what I needed from Tesla"
We're not failing, but even from a (modestly) successful startup perspective, the vast gulf between "people who like to talk to you as if they will spend real money" and "people who will actually spend money" is painfully apparent.
You never know if someone is willing to pay until you ask them to open their checkbook.
The same theory can be applied to most investors. (pre-handshake protocol at least)
You throw up a cool pitch with some videos and vague promises, and watch the cash roll in. If the cash does indeed roll in, then it's a good idea!
Then you get to work, and hope no one remembers in 6 months that you promised to deliver them some amazing gifts. :-)
Avoid the confirmation bias of your peers, and target people actively looking for your idea.
Build a fake checkout that collects no data, and thank your 'paying' users for signing up to be notified when X goes on sale.
(You should also probably tell them that no financial information was actually stored.)
Kickstarter seems like a better approach, since everyone KNOWS there is no product to buy.
I still can't bring myself to do it, though.
Are you serious? That's a criminal act called fraud.
Please don't follow this advice. Just do something legal like having users sign up for a mailing list.
Much better to have PPC + landing page and a "tell me when this is available" signup.
Contrast that with polling a random sample of your target demographic, where any number of things can spoil the results. People could say they like the idea just to be polite. People could have never thought about the problem you're solving before, but think it's neat. People can misjudge how much they care about it. People can have an enthusiastic initial reaction, but think the idea is dumb on further reflection.
It's the same sort of problem with polling for election results: you can't ask a whole bunch of random people who they're going to vote for and turn the raw results into a pie chart. To get useful data, you have to carefully predict which of your respondents will actually turn up for the election, and which ones aren't going to change their mind between the time you poll them and voting day. And even then, in the end, it's not the pre-election polls that determine the new leader, it's the election itself.
That distinction is what's being presented here; asking a bunch of people is only useful if you're very careful about filtering out the junk answers. You should instead measure people who have already decided, without your prompting, that they have a problem and have decided to seek out a solution for it.
What you should be trying to find out is:
1. if they currently spend their money somewhere else to solve their problem
2. if your product is so much better at solving the problem, that they will want to switch.One click, a single click will not destroy you brand. And OP would've realized that no matter even with their best shot they couldn't get 10 clicks.
10 disappointed non-customers won't destroy your brand.
The problem is that the majority of first time founders are: (1) overly protective about their non-existent brand (2) afraid that they will not get any clicks (3) so attached to the idea that even if no one clicks, the design is to blame not the idea
This leads into spending far too much time not iterating on a broken realization of an idea, insisting that "with time it'll work out" or "just a little further, we're gaining momentum", when evidence shows that the company is actually at its worst :P
Okay i have a page and i HAVE to get people here with paid traffic like adwords because no one will write about my non-existent app.
So now I get a bit of traffic but nobody clicks the buy button...
Is it because i drew the wrong crowd? Is it because they don't know me? is it because adwords conversions are usually very low so do i need to pay for more traffic?
If it actually is because my product sucks, then cool.. But what do i change?
There is no way to know this; which is why i believe the buy button is not the way to go.... at the beginning.
You can still do this before you start building, but it must be done after talking to at least a few customers.
The traditional customer interviews are always the best way to start.
Firstly you can learn how other people describe the type of product you are offering - not necessarily how you describe it. With Adwords you'll see the types of keywords that people are typing to have your adverts displayed, some of these keyword phrases may include words you haven't considered. You then add these new words to your list and see the results. Rinse and repeat.
Now people are coming to your site you can track what they do. What price point has the most clicks, what wording bounces the least, etc.
I have done exactly what erikpukinskis described and it serves to not only validate (or not) your idea, but the great thing about this is I learned far more what real people are actually wanting, not what I thought they wanted.
A couple of weeks investing in a quick wordpress site and some adwords to validate and modify an idea before building is so much better then building it then seeing if they will come.
> Is it because i drew the wrong crowd? Is it because they don't know me? is it because adwords conversions are usually very low so do i need to pay for more traffic?
You don't just put up one ad using some keywords and be done with it. You constantly tweak, seeing what keywords people are using to find your ads, which keywords have the highest click through rate.
When I did this for a little idea I was thinking of doing, this was incredibly helpfu
The product I was think about doing was related to niche websites. I thought most people would use the word "niche" to describe them, it quickly became apparent that the real word people used was "affiliate" I saw "affiliate" appear a lot with related keywords and in the stats on the site, so I added an adword targeting that and related keywords, CTR doubled.
Using adwords helps you define and recognise the crowd you draw so you can best cater to them.
> If it actually is because my product sucks, then cool.. But what do i change?
Again, don't keep it static. In my experiment above, the first 100 clicks saw no interest. I changed some wording, a tiny improvement (less bounces etc). I changed the price, less bounces. I added FAQs, less bounces, I tweaked the available functions - possibly people would want feature X. Bang! people clicking on the "order now" button. Feature X is what people want
> There is no way to know this; which is why i believe the buy button is not the way to go.... at the beginning.
Seems like you haven't tried it, ;)
All im saying is - as i summed it up in the last line - you need to talk to customers before wasting adwords dollars.
What you describe is using adwors to find your audience. I guess there might be situations where that would be useful
> So we talked to a few artists who said they thought it was a cool idea. BOOM! Our idea had been validated!
The idea had not been validated at all, just been told it was "cool". What they should have done next (or possibly at the same time) is spend a couple of hundred dollars on adwords to see if a cool idea converted into something people would actually want to buy.
What they should not have done is
> stopped talking to artists for a year and built (and rebuilt) the software until we thought it was acceptable
My point is that I would far rather spend $200-$500 on adwords and not on 1 year development of a product that is thought to be cool, but no one has actually had the opportunity to come to it fresh and click on an "order now" button.
As for the advice of getting clicks, strongly product dependent.
Imagine you are a PaaS, say Heroku. It'd be a bit hard to adequately market such a product without convincing docs and people actually playing around with it. That is.. building the product.
And even if you could get some CC conversions, it still wouldn't validate the product because so much of the stick/not stick with it will come down to user experience. Which for a pretty technical product is a bit of an unknown.
stop worrying about what might happen, and do experiments to see what does happen.
ask people to buy and collect money. if they do, tell them it's not ready yet, do they want to wait, or do they want a refund?
S I M P L E S !
@startupjerkfest
If anything, your story adds more fuel to the fire for the approach that @sgblank advocates[1][2]. Get out of the building, talk to customers, validate customer needs, etc. We've been doing this, but - to be honest - we haven't done as good a job as we could. Hopefully we will soon start another big round of Customer Development interviews, much more targeted this time, building on the feedback we got the first go-round, and moving more into what Steve calls the "Problem Presentation" phase.
It's a tough slog, but I continue to remain convinced of just how important it is.
[1]: http://steveblank.com/category/customer-development-manifest...
One of the most helpful guides is to try to make a mistake in the other direction. Try to talk to your customers too much. No early stage startup ever died from talking to their customers too much.
I have seen so many people start their own company after breaking off from some existing company and "doing it better" or realizing some previously un-claimed niche specifically because they had the industry knowledge.
Why was that sufficient data to justify spending months and months of your life bringing this startup to fruition?
EDIT: I did not intend to make a sly insult toward the author. I've seen people do startups with similar justifications and I am confused.
There's so much retro-active quarterbacking that goes on (especially in the VC-world) that says X company was success because they applied this-thing-I'm-just-now-naming as a rule. Even though, Apple has taught us things like you're users don't always know what they want or need.
With launchrock + adwords this has become stupid easy.
They played a hunch and lost. The linked post details lots of mistakes, but this particular one doesn't seem like one to me.
You've got a business when people repeatedly exchange value with you. Kind words are validation of a sort, but the weakest kind. To go from there to spending a year building a platform is basically hearing what you want to hear. Better not to ask than to believe what you hear uncritically; if you don't ask, at least you know you don't know.
The data that was lost right here: "After that moment we basically stopped talking to artists for a year [...]"
Find customers as early as possible, engage with them as often as possible, and really really listen to what's being said. This is a huge benefit of bootstrapping. Customer engagement from the earliest possible time is vital to the process of transforming an idea into a product.
These are money-losing businesses. As we speak.
Real life is much more complicated.
EDIT to add: Some people might bring up airline tickets or hotel rooms. Limited analog inventory, not infinite digital inventory.
Sorry, had to say that :) It's fun for me how analog/digital have become synonyms for material/virtual.
Amazon and Travelocity rightfully caught a lot of flack when they were caught trying this (perhaps pricing A/B test?) years ago.
Companies like this make it very hard to explain what we do which is use machine learning to maximize profits.
i am one of those people. why do so many bands have such a minimal online presence that i cannot even buy a t-shirt? surely these days it should be trivial for any band to create a store with some basic items generated from a few uploaded images. there are people out here looking for something cool to buy to give back money for what we just heard... even stickers are nice.
We decided to ask ourselves one question: How to we validate an idea before wasting months on an idea that only we seem to think is cool?
So we are creating WillThisFly? to ask that very question... it's a site that allows you to try out your ideas and projects, get feedback and refine them before committing resources to it.
Shameless plug: http://willthisfly.net (Just launched last night)
Only thing on there at the moment is WTF? itself.
All I can say is, it has happened to probably everyone at one stage in their startup career... don't give up, refine your ideas, create MVP's and keep trying...
Sometime it just need a few more optimization iterations. Considering the Facebook example and prior art, this must be really frustrating for those who missed the gold pot.
If we had something like this when we first started out it would have made life so much easier and we wouldn’t have wasted months on projects that weren’t going anywhere but may still have been salvageable with the right feedback.
The iterations and feedback are key: This involves a simple, instant method (voting) and the more involved approach (comments). With both of these, a project owner will be able to find out if his project is worth pursuing and if it is, be able to iterate, change or pivot accordingly until he is happy he has a product that will work.
We will be adding a blog shortly that will outline strategies and features and more information about WTF?
At the moment we are using WillThisFly? to develop WillThisFly? and it's early days but it's coming along nicely and we are always open to suggestions :)
Your problem wasn't amazon payments, or flakey artists jumping ship. It was that your audience wasn't even on your radar.
also it was hard to understand what the site does, there is something like a price slider on the demo page but does not slide. what the hell is going on? better read some explanation...
the founder probably did many mistakes, good luck next time.
I'm just interested in how people pick the ideas they pursue.
Who is this Dalton Caldwell, and why is he relevant?
The notion was that both VCs and founders should look at broad markets and dig in to find opportunities. As Bezos did back in the day with books. Less fun initially, sure, but taking one's company behind the barn is definitely not fun.
And after watching it I still don't understand the "decrease price by a dollar" pricing scheme.
If you have no product and are not asking for a sale, saying 'yes' has not cost to the person. Saying 'no' makes them a grouch, and they would have to justify why they said no. So lots of people say 'yes' even though they don't really mean it.
That's why the only data worth talking about is sales and adoption, and why minimum viable product is the way to go.
Lawyers are not just there to object to things and make life difficult for dreamers, they're there to spot major potential pitfalls like this and steer around them. Far too many entrepreneurially-minded people see contractual and statutory constraints as some sort of obstacle course designed solely to prevent competition or enterprise, and react to said constraints by simply wishing them away. I was impressed that your reaction to this problem was to pay everyone as promised and retool your application to be compliant with Amazon's requirements, rather than simply blaming them for your problems. A hard lesson to learn, but one which will put you ahead of the pack in future.
My feeling is that you conceived the startup guided mainly by your desires than the one of the artists, visitors and clients. Unfortunately your desires where not attractive for them.
Mistake n° 1 is the domain name which is the first message you give about your business and service.
Also, there is a notion amongst us entrepreneurs to persevere amongst all odds. This might be dangerous at times. There might be a massive market for your product yet you have approached it in the wrong way. The thing is, if you have no data, it is very difficult to know what REALLY went wrong. For example: Drew Houston from Dropbox early on stated that selling Dropbox through adwords was costing them something like 300 dollars per acquisition, once they introduced their double-sided referral scheme Dropbox started selling like mad. It was what Eric Ries calls a Pivot.
When it comes to commerce, I'm liking the model of first building an audience and then adding commerce.
1. The site's tagline is "Sell your $h!t with Social Sales!" which I would think is kind of off-putting in the context of a vendor relationship
2. Your sales model appears to be in contrast to how supply and demand work. Your model is that as more buyers sign up, the per-unit price goes down. I understand your theory is this causes people to share it with their friends. But, people who are buying indie music not only don't want to screw the artist -- they're also not going to bother talking their friends into something just to save a nickel.
3. I think this would have made more sense for the artist if the price went up (slightly, like from $4 to $5) as sales went up, with the early people locking in their price.
One of the most useful things I do to validate an idea is to actually use YC's application- if you can't answer all the questions about your idea without any doubts, you're don't have a solid idea yet. And validating your idea means to follow up at the very least with the people that said it was "cool". Forget the stealth startups, be completely transparent in what you're building and have beta users follow you from day 1.
Good luck with your next thing!
For a site that resonates with artists, check out Reverb Nation:
A sample artist page here:
http://www.reverbnation.com/evangibb
Instead of buying their music, the site is focused on you listening to it via the embedded player and then going to see them live. You can even buy them a gift card so that they can buy advertising. They're growing like crazy with a marketing budget close to zero.
Thanks for sharing your hard learned lesson. It reminds us all to get out of the building and talk to users.
Once he found out about the dynamic pricing he tells us “I think I am just going to release with another platform.” FUCK! Are you serious????
What other platform(s)? What were differentiating factors between those, and your service? Do artists suffer any particular trending pain-points in alternate services?
1,700 or so artists could probably provide great feedback into what they actually want in a platform, vs building it in a vacuum.
Thank you for sharing!
Also, happy to hear you didn't mortgage your life savings and burn out in grand fashion. You're wise beyond your years.
Your startup failure was good. It hit quick. You learned. You moved on.
If I had more time I'd tell you about all those failed startups that suffer a really slow death. Like the YC startups. Pretty much all of them are failed. They haven't seen the light yet. You have. Be grateful.
Do take a break. A year sounds about right.
This is not something I would be telling tech-savvy people.
Landing on that site and seeing the big 'Create Sale' button is pretty confusing. I don't think 'oh this is a site for musicians to sell their music directly to fans'. It also claims I can use 'social sales' but is that a meaningful term? I've never heard it before and it sounds pretty buzzwordy.
edit: Just watched the video on the front page and I can easily believe that only 1 out of 1700 people thought it was worth bothering with.
The execution just seems awful.