Ask HN: I'm lost. Please help
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Tell them you need an actual salary and actual health insurance in the next 30 days. If the venture can pay you to keep at it, that's great. Otherwise you'll have to start looking around for a real job in a couple of weeks. Even the most brick-and-mortar type of businessperson will completely understand this.
Stick to your schedule. It will either work out or it won't.
If it doesn't, no hard feelings.
If you've truly lost faith in the founders and business -- which you have -- you should leave now & cut your losses. It's not going to work out, regardless of salary.
As for how to make money after you leave -- get a job or find consulting work. Then jump back into starting a business when you're ready again.
I'm starting a cloud company in Nairobi if you want to do something totally crazy ....
Talk to the people you meet and a new startup will come your way before that year's out.
Since you already are doing consulting on the side, i think you may be able to squeeze 3 months in on trying to get funding, just make every action Fast, Focused and Fundamental to your objectives. Godspeed!
If you're out of money it might be hard to pull this off as I've heard seeking funding is a full time job (or two, as your cofounders have shown) so the product has to be mostly good to go (for at least the time being) if that's going to work.
Using the product you already built with company funds is almost definitely off limits (IANL), so I'm not quite sure how that strategy could be feasible.
"I feel as though I've invested too much time and energy to bail now."
This is a very dangerous way to think about it. This is your life you're investing here.
Perhaps to break it down to oversimplified but still valuable math:
(probability of success)*(personal outcome) = expected outcome
If you think they have a 10% chance of succeeding, but if they do they'll be legitimately worth $10M of which you'll get 30%, then the expectation value is $300k.
Do that calculation based on the numbers that you personally feel are correct. Compare to what you'd be making doing something else. Take into account that you've already worked on it for a year and a half, which is probably at least worth $100k. More since you may never get it.
If the project can't even meet that minimal standard for being worth your time, then you're unlikely to even make what you deserve for your time, much less receive a reward commensurate with your risk.
[1]: http://www.lifehack.org/articles/communication/how-the-sunk-...
http://www.theatlantic.com/health/archive/2013/05/how-to-wal...
Eventually I did quit, and everything was okay.
If this is your second job ever, then it's natural that you feel like this job represents a huge portion of your life's work. That's only true in that it represents your life's work up to that point. When you are 60, this will be something you see as a tiny portion of your work life. Eventually when you list the things you are most technically proud of (which you said you are), this probably won't make the top 5, because you will make so many more awesome things over the course of your career.
Read 'Eric Ries - The Lean Startup'. Your time at this startup is not necessarily wasted, if you've learnt stuff, networked, and somehow helped you get your next job.
I'm currently reading through "What I wish I knew when I was 20" by Tina Seelig (more entrepreneur-y than expected, but pretty good) and this exact topic is discussed in Chapter 5.
> […] “even great ideas require a tremendous amount of work to reach a successful outcome, it’s incredibly hard to know when to keep pushing on a problem, hoping for a breakthrough, and when to walk away. We all know that persistence is to be admired, but when does it become foolish to continue working on something that’s never going to fly? Gil Penchina, CEO of Wikia, describes the dilemma wonderfully: “If you throw gasoline on a log, all you get is a wet log. But if you throw gasoline on a small flame, you get an inferno.” That is, it’s important to know whether you’re putting energy into something that has the potential to pay off. This is one of life’s biggest challenges. We often stay in dead-end situations way too long. This occurs when companies commit to a doomed product or project, or when individuals stay with jobs or in relationships that make them miserable, hoping the situation will improve. So how do you know when to quit? This is a huge philosophical question. It’s always a mammoth challenge to separate your desire to make something work from the reality of the probability that it will work. Of course, the more you put into a project, the more likely it is to succeed. But some efforts will never pan out, no matter how much time, money, or sweat is injected. The most scientific answer I’ve found is, listen to your gut and look at your alternatives. Essentially, you have to negotiate honestly with yourself. Do you have the fortitude to push through the problems in front of you to reach a successful outcome, or are you better off taking another path?
> So quitting is hard—but it’s even harder to do it well. I’ve seen people quit gracefully and others quit so clumsily that they leave a huge crater in their wake. As discussed in detail in chapter 8, you are likely to bump into the same people again and again in life, often in unexpected ways. This alone is reason enough to make sure that when you quit, you do so with careful thought about the consequences for those around you. Besides the impact that quitting gracefully might have on you later, it is just the right thing to do. You can never rationalize quitting in such a way that you hurt your colleagues, friends, or former business.
> A colleague told me about his assistant, who was doing a terrific job. He gave her great reviews and spent a lot of time talking with her about her career path within his group. She made it clear that ultimately she hoped to move into a different field, and my colleague was supportive of this. In fact, he told her he would be delighted to serve as a reference for her anytime. With this as a backdrop, my colleague couldn’t have been more surprised when his assistant came in one day and gave two weeks’ notice. The team was in the midst of a huge project, the deadline three weeks away. She was going to leave one week before the project was completed, putting the entire team in a very difficult position. My colleague asked her several times if she would consider staying one more week to help him get to the end of the project, which involved dozens of people directly and several thousands indirectly. She refused, saying, “I know you’re going to be unhappy that I’m leaving no matter when I go, so I decided to do what I want.”
> My colleague felt as though he’d been kicked in the stomach. It was nearly impossible to fill in the holes she left during the last week of the project, and everyone worked around the clock to try to fill the void. All those who worked with her will remember that decision. Despite the fact that she did a terrific job while she was with them, the damage she did to her reputation during the last weeks of her employment dwarfed all the positive things she had done in prior years. In sharp contrast, I’ve seen others quit jobs with remarkable style. Even if they were leaving because the job wasn’t a good match, the grace with which they left made such a positive impression that everyone involved would be pleased to give them a glowing recommendation at any time in the future. They provided enough notice to fill any gaps, they took the time to put their work in order so that someone else could pick up where they left off, and they even offered to help with the transition. These folks are heroes. They mastered the art of quitting well, and used their skill to turn a bad situation into something positive.
Source: been there, lots
Ignore the rest of the things you're worried about, don't say anything about serious doubts or that you think they are idiots, just let them know it's not a viable for you to continue to work without pay. Keep it simple.
If you're anything like me, this incredibly stressful time will end up materially pushing your career forward in the future.
I am pretty certain when you come back you would know much better what to do.
Be open and honest - just tell them that you need a salary. Going a year and a half with no salary is not something anybody has a right to expect from you unless you're already wealthy.
They will never change. You'll spend your whole life getting them to be less idiotic, and it will NEVER happen. No matter how good the product, how good the idea, how good the business, how much the money and how much your passion; if you do not have a team that you have any faith in, every step forward will always result in two steps backwards.
I'm a self-certified expert in team dysfunctions and i'm telling you categorically, that a dysfunctional team can never make it, despite what anyone will ever say to you or whatever ounce of hope you may have.
I'm on skype or available via email if you want to speak further. Let me make it clear, i'll be pretty harsh with you, because i rather see you wince a little now, than die inside a few years later.
You've gained a whole load of experience. Value it and cherish it. The experience is worth far more than the time invested and the product.
Let it go. Move on.
The only way to get out of a rut is to take a step back and JUMP!
You've got to let go of this attitude. If you cling to it, then you will never leave, even if your co-founders are idiots and the business is a failure. What you need to do is quit as soon as possible. Only then can you start on a better endeavor and improve your quality of life.
I once heard someone say, "Give up on crap." It may sound juvenile, and it goes against the rosy, feel-good "Never give up" pep talks that we're used to and almost expect to hear. But I've found it to be a much better guide in life decisions. Go with it.
Look up Sunk Cost Fallacy.
Also this related episode of Freakonomics is great: http://www.freakonomics.com/2011/09/30/new-freakonomics-radi...
For many endeavours a certain amount of investment is required before returns are seen - investments in time and money in particular. For this reason there is almost always a cost to be considered switching between endeavours.
So, while I agree that throwing good money after bad is a silly thing to do, the consideration should be how much more investment is needed to make this endeavour profitable vs how much some other endeavour will take to become profitable AND how much it will cost to switch.
You shouldn't weight how much has already been spent in this consideration, however you have to understand the impact existing investment has had on the road to profitability.
Time and money already spent is a crude metric that lends itself to the Sunk Cost Fallacy, but considering the metric is not the same thing as falling victim to the fallacy.
[EDIT] The following comment explains this really well through an example:
> vs how much some other endeavour will take to become profitable AND how much it will cost to switch.
Wait, what are these two costs? Aren't they the same? Where did the cost of switching come from?
I don't think I misunderstand sunk cost, but perhaps I didn't explain my point well enough.
I agree that you need to be forward looking, but whilst looking forward it can be important to consider existing investment. Existing investment is not ALWAYS worth nothing, so its value needs to be accounted for. Existing investment is also a metric that, whilst lending itself to entwining one in the Sunk Cost Fallacy, is an important part of answering the question "how much more investment is needed?"
The sunk cost fallacy applies in a situation where previous investment has been lost. The typical example is in gambling, where each spin of the wheel is independent of how much you have already lost on the table. When in a startup, however, previous investment is not necessarily lost, so switching to a new one is (typically) not the same as continuing one you have already invested in.
>> vs how much some other endeavour will take to become profitable AND how much it will cost to switch.
> Wait, what are these two costs? Aren't they the same? Where did the cost of switching come from?
The cost of switching is a way of characterising things like lost earnings and payouts that are not directly related to starting a new endeavour. They are typically, though not always, constant regardless of the new endeavour being considered, and so it makes sense to keep them separate.
Examples of switching costs:
* paying out a phone contract;
* loss of long service benefits (if someone is close to receiving long service benefits they will typically wait to receive them before switching jobs);
* non-compete clauses.
| For many endeavours a certain amount of
| investment is required before returns are seen
I definitely did not advocate gambling money away, but rather that "an objective view of the situation" requires you "to understand the impact existing investment has had on the road to profitability."
In a follow up to another comment in this thread, I specifically call out the difference between gambling, where (usually) any investment so far has no impact on future earnings; and investing (in particular investing in startups), where the time and money invested so far can have an impact on future earnings.
To be concrete, the next spin of the roulette table has no correlation to the amount of money you won or lost on the previous spin, but your chance of selling an app on the app store in the next month is directly correlated to how much of the app has been written already.
A year later he's still at it and has made no progress. I gave up my founder's share for a more modest share. If the company ever goes anywhere I'll take my paycheck, but at this point I just consider that time to be a financial loss.
There are many ways to leave a company and still maintain the possibility for a payout for your work if it ever comes to that. If they're the types that would try to screw you over when you leave, then you probably should have left a while ago.
You might be able to convince them to pay you out for your share of the equity.
You're talking about sunk costs. There's nothing you can do about that now. Focus on the future. Think about your future time and energy.
More often than not, I think that's good advice for darned near everything. I'd say take a fresh look and weigh your options. If you didn't have a job right now is this the one you'd take? If not then stop! Because that's what you're doing every morning, you're taking this job for no better reason than you took it yesterday and the day before that.
Reassess what's important to you and go for it. You need to ensure that your own personal needs are taken care of first before others, and if that means leaving the startup behind, then so be it.
1. If you think that there's a problem, there's a problem.
2. The best kind of family business is a sole proprietorship.
I was once the drummer in a touring rock band. We had a real shot, with significant milestones behind us. Unfortunately our weak link was an immature, melodramatic singer that was terrified of success. I stuck around for two years longer than I should have, feeling like I'd invested too much time and money. My ego and identity were tied to the project.
Well, surprise surprise: the band broke up, and it sucked. However, there's no question that I learned a huge amount and that it prepared me for everything (good and bad) that came after.
You'll be just fine.
Well I think you found your problem right there. Whether or not, they're actual idiots, this is a problem you need to address. EIther get out of it or you need to find a way to respect them.
If you can't respect your co-founders, you're gonna have trouble working with them.
If you have to invest your own cash to pay your living expenses, then do so up front, in a planned, structured amount, get equity for it, and pay your salary out of that fund.
If you aren't paying yourself or getting paid, you aren't working at a failed business, you're unemployed at a non-business. This makes your decision to stay and restructure or bail a practical rather than emotional one: is making your own payroll until things might work out at all viable financially? Will it make you do things you don't want to, or can't afford to, do?
This has nothing to do with not trusting your family; I grew up with parents who ran their own business, and religiously maintained separate business and family accounts, paying themselves (and later, me and other non-family employees) salaries. I've seen the results of small partnerships and family businesses that didn't do this; it isn't pretty even when it works.
Guess what, never happened. My partners were idiots, they didn't want to do anything I suggest. I told them about TechStars Boulder at the start some 2.5 years ago now (I live in Denver), they didn't like the sound of it, didn't like having to give away equity for 'nothing in return'. Now, 2+ years later, the one remaining Biz partner wanted to do TechStars, is leaving his day job to put everything into this. I told him I simply couldn't take the time off to do it now, that time had past, I have a new fulltime job I love and there is no way I'd jeopardize it for our startup now (turns out he applied and we were turned down anyway, probably for the best).
Unfortunately sometimes you just have the wrong partner(s), it's as simply as that. Why not get a full-time job and go into maintenance mode ont the startup? That's basically what I finally did. I told my remaining partner I can't live like this anymore, barely scraping by and that I was going to get a fulltime job and commit to them 100%. I will still fix bugs but as far as new features go, I simply tell him I won't add anything until he signs up 10 new accounts and pays me for my time now. Hasn't happened yet and he's been trying for about 6 months now focused on the business trying to sell accounts.
Be honest with them and tell them you can't live like this any more, you've kept your end of the deal, they are welcome to soldier on but you have your own responsibilities to take care of. You'll gladly help maintain what has been built, fix bugs and do what you can outside your normal 9-5 job, but otherwise you are going to have to focus on what's best for you and your family. If they are good people they will understand, if they are not, then you've done all you can and should feel fine with moving on and doing what you need to do.
- Don't take advice from people who know very little and have no context.
- Clarify your ownership position in the company. "Can you explain my equity thing to me again?" Know what you own now. Know what you're entitled to in the future. If you already know this information, you can skip this step.
- Think of a person you completely trust and whose intellect you fully respect. Let's call them X. Sit down on your own and write X a letter that outlines the whole situation.
Address at least the following:
a) What you want out of the deal b) What you think it'll take to make the deal successful c) Conditions under which you're willing to keep at it d) Whether or not you want to keep going forward with this thing e) All the other important things that you know.
Make it a good letter. Spend real time on this letter. Something around 1,000 words or more.
Don't send letter. Save letter. Go to sleep.
- Next day (after you've slept and eaten), revise your letter. Really go through it and make it say what you want it to say. Take out that part that's irrelevant. Add the section about the thing you forgot.
Don't send letter. Save letter. Go to sleep.
- Next day, read letter. Revise it again if you need to.
Twist: The letter isn't for X. It's for you.
- At this point, you've built a clear inventory of what you own in the business and what you think needs to happen in order for it to work and for you to stay.
My guess is that you'll then know what you need to do. That might mean sit down and talk with the idiots. It might mean that you need to leave asap. It might mean an N day ultimatum. It might mean something else.
But whatever it means, it will have come from you.
Also, read this. I have it on the mirror in my bathroom.
http://www.cs.columbia.edu/~gongsu/desiderata_textonly.html
You are going to live through this experience. You will benefit from the lessons you've learned in this experience. This, too, shall pass.
Good luck, fellow traveler.
You need to determine if the product/idea is actually viable and the problem is in fact that the other founders are failing to execute, or the is is something inherently flawed with the business model. Have some entrepreneurs or VCs you trust and respect review the business and give you their opinion.
If the problem is the other founders, you could start talking with them about bringing on someone to turn the company around or about selling the company to someone else.
If the problem is the idea/product/business model, you should move on ASAP.
In either case, if there is some useful technology that can be repurposed for another idea/business, make sure you get a unlimited license or if the company folds, take ownership the IP assets as back unpaid salary.
Make sure you get the transfer of IP in writing, ideally reviewed by a lawyer. If you do build something successful with the IP, you don't want "the idiots" coming around and claiming they own part of it.
One thing I noticed in your post that I would strongly caution against: reading too much into VC rejection. I think you're placing too much faith into the VC's arguments and are being a little too sensitive to rejection. VC's are routinely wrong or misguided, and the vast majority of VCs do not deliver returns beyond that of the broader stock market.
We didn't need money at the time so it was not the same as your situation, but VC will often just not click with a company. It is actually a lot like dating in that they are trying to read the people and what they're saying and projecting it out over the course of the relationship.
They all came back, unsolicited, in 9 to 16 months, but by then we had reached a point where we were cash-flow positive and working with pilot customers to refine the product for launch.
VC will rarely say no directly because things can change at any time.
NB: This is Silly Valley, where VC are thick on the ground.
This is the feeling! I remember this.
Let me be extremely clear here: forget about your time investment. It does not matter. If you don't believe in the company and especially in your business partners, leave NOW. Each day you stay is delaying the next big step in your life that will get you to a better place and a happier life.
I've been there. Did it for years with the wrong partner because I didn't trust my gut and leave early on. I should have. I left after 5 years, abandoned all that work, and I've never made a better decision in my life.
Startups are hard, and they do have their ups and downs, but that is not how a startup is supposed to feel. Get out now.
When you're happy, you won't regret walking away even if you left a little bit of money left on the table.
It is never too late to fold.
Whatever your investment was, consider it lost. The experiences you gathered getting the stuff done are all you gained and nobody can take that away.
An ultimatum might give you the opportunity to negotiate rights to the assets you created during your work (If there is no formal incorporation yet you might own the stuff anyway).
I'm sure you'll find something worth your energy! Good Luck!
The startup? Almost irrelevant, in comparison. When you look back on this in ten years, you'll agree with me!
After you've proposed, sit down with your fiancée (an awesome proposal is one where she can't say no!) and ask her what she honestly thinks of the business. Women are far better judges of these things than men - particularly men who are building the thing in question. If she doesn't think it's compelling, simply tell the other guys you are getting married and need a steady job, so you're leaving. You've learned a lot (about finding good co-founders, as well as al the tech stuff) and are a more valuable person because of it, so take that as your payment.
If she thinks the business is a great idea, things get more complicated. My suggestion would be leave, find a better co-founder, and start over. Or you could try to negotiate with the other guys for some up front payment and changes to the way they do things.
1) You don't believe in the business model. Is that fixable? Are your co-founders similarly doubtful?
2) "I think my co-founders are idiots." If you actually believe that, quit. Right now.
3) "I feel as though I've invested too much time and energy to bail now." You should Google "sunk cost fallacy". If you buy stock in a company and it starts to tank, you should evaluate whether that stock with this new information is still the BEST place for your money. MANY investors don't do this-- instead, they get emotional and refuse to take a loss on a stock, hoping against hope that it'll bounce back. They should be saying, "with the information I have now, would I recommend that a friend buy the stock right now?". How much time you've invested should have NO BEARING on what you choose to do moving forward.
For your happiness, wealth, or whatever other goals you have, is this company the best way to be spending your time? If you could pretend that you weren't working with these guys and they approached you to be a co-founder RIGHT NOW, would you take the gig?
Please send me an email if you're interested: carter@gameclosure.com.
It sounds like you have had an expensive lesson in picking partners, try to exit as cheaply as possible where the costs factored in include family relationships as well as your time. Others may also see the end but not want to be the one to call it but it is worth having a story for what you will do instead.
As others say forget about the sunk costs just optimise for the current situation and the future.
From what I read, the rejection of a single VC meeting seems to have put you down. This is normal. Meeting 10-20 VCs before getting an investment is not unusual.
People here have nothing to loose so just take your time before shutting everything down.
All the same, a lot of us have experience falling prey to a sunk cost fallacy/gambler's fallacy situation, and I think anyone advising the OP to leave based on that has their heart in the right place.
TL;DR: advice from people on the internet is best ingested with a keg or two of salt.
If you are a startup founder, which it sounds like you are, and not an early employee at a startup, then this is unfortunately the wrong attitude to have. There is no "their side of the deal", you are all committed to making the business work and you should be prepared to do whatever it takes to make it work including pushing all your own personal boundaries in order to get shit done.
In my experience the startups that have performed the best are ones where all the founders are prepared to roll up their sleeves and do things they have no experience with if necessary. The ones that fail are the ones that squabble over who's messing up at "their part of the deal".
Too many times I've seen founders (especially tech founders) sit doe-eyed, waiting for someone else to set the direction, or raise money, or figure out the "business model". If this is you then you should look into joining another startup as an early employee rather than being a founder yourself.
If you objectively believe that your team does not have the skills necessary to succeed or even move on to the next step then you need to leave. Plain and simple.
But leave or stay, lose the attitude that certain things are above or beneath your ability to do, or even worse: "not your job".
After I left I got a regular job with regular pay to get myself level financially and emotionally. After another year or so of that, I'm at a startup again. This time, with much more success.
I'd cut the cord and get out.
I came to the realisation that
* I no longer enjoy what I am doing * I'm not particularly happy * Going into the office is now a chore * I can't see a future where I am at the moment.
Once I realised all of these things - it took a few months - alarm bells started going off. I have now started to make steps to change my situation:
* Seen my Lawyer * Written and dispensed my resume * Spoken to friends about jobs.
I'm now much more comfortable, knowing that I can survive without the company and will probably be much better off without it.
I quite liked the following articles: http://westonmcbride.com/blog/2013/05/06/why-i-abandoned-my-... http://harj.posthaven.com/co-founder-breakups http://jamesmaskell.co.uk/2013/how-to-get-a-job-after-startu...
"I respond half-jokingly that every day is either the best or worst day of my life, that I've experienced the highest highs and lowest lows of my short career"...
That is the most accurate depiction of startup life in my experience. Many times it is unfortunate. Many times it is euphoric. I wrote one of my mentors an email similar to that very recently.
Lots of people here are giving you advice like you asked - do this, do that. I'm not wise enough to tell you what to do. I'll only say this, you seem to love the product you are building, so there is something in this endeavor worth while. Obviously, you need money to live. You need to eat and have health insurance. That is your life we're talking about.
The stress is sometimes nearly unbearable, and you feel like you are all alone when you talk to your "normal" friends. But look at this section, 150+ comments from people who understand the stress, the frustration, the highs & lows. You're not alone. You can make it.
I was very recently in your position. My advice to you:
Get the f* out... NOW!
If I had to guess, you were probably never that impressed/excited by your co-founders to begin with. But you did it because the business-case made sense. That's what I did, anyways, and it was one of the biggest mistakes I've ever made.
If you think your co-founders are idiots, then it's over. If your experience is anything like mine, then not only are these guys not pulling their weight, but they probably have a lot of half-cocked ideas that you have to fight them on, they go off doing things that make no business sense, and have made you feel embarrassed for them (and your company) on more than one occasion.
In my case, I considered leaving my startup at the 15 month mark (and even before that), but hung around some more trying to make things work with co-founders who weren't doing their part. I had a very candid talk with them (not the first one either), laid out the things that needed to happen for me to keep going within what time frame, and everyone agreed.
Well, I did my part. They didn't. I knew, deep down, that they wouldn't hold up their end. If they were the type to do their part, they would've done it a long time ago. Denial is what kept me going for that last push, and it was a total waste of time and effort.
So I left. The co-founders balked, then got angry, then tried to get me to come back. I did not waiver. You shouldn't either.
The co-founders got over it. We worked out an agreement. We're still friends and things are fine. It will be fine for you too.
Now that I'm out, I'm watching their ship sink faster than ever. And I'm so glad that I'm not on it.
Hope my story helped you in some way. It was therapeutic for me. :) Now, get yourself out of there!
Unless you feel there's a realistic chance of success within the timeframe that your personal situation allows, you should bail. Don't let the past trap your future.
"I've learned more in the last year than I have at any other point in my life, and I've become a better programmer and designer. I've always said that even if this doesn't work out, I'll have become a better, more capable professional in the end. And I feel that I have."
And you no doubt are! I'm not sure where you are, but there are tons of companies in SF/Silicon Valley with 6-50 employees, VC funding, etc that will pay relocation and a nice salary for a versatile full-stack developer with demonstrable skills. There may be a startup in the future, but there's no shame in using the skills you developed at this startup to get a nice job for a year or two. The choice isn't between BigCo and no salary frustrationsville.
"I can't imagine working for a big corporation again, but should I just give it up and get a "normal" job for a little while to build up some savings again before embarking on the next venture?"
There are plenty of small venture-backed startups that will pay you a good salary if you have the right skills. You just need to find the right fit.
If you choose the former, it should start with a frank but non-confrontational conversation among all of you where you discuss what is and isn't working with your relationship. Don't overfocus on the business. The day-to-day of a startup grows from the relationship among the co-founders. That's always at the root.
For example, if the business model isn't working, why don't you have a relationship where you can say "Guys, this business model isn't working. We have to do something different. Let's figure this out."? Over-focusing on the business will result in a laundry-list conversation when everyone just unloads their grievances all at once. It's not productive.
If going into the conversation you feel the urge to let your co-founders "have a piece of your mind" then don't have the conversation. You need to be calm, in control, and aware of the real source of your own frustrations.
Most likely there's a long series of missed-but-unstated expectations, both big and small. You have to acknowledge your own responsibility in this situation, viz., as a co-founder you have a responsibility to bring these up the second they happen to avoid a "blow up" situation. Yet here you are, in just such a situation. You're partially responsible for that, whether your co-founders are actually idiots or not.
You have to be prepared for your co-founders to feel similarly about you. Avoid the trap of allowing the conversation to become a tit for tat. "You forgot to publish that blog post." "Yeah, well, you forgot to follow up with a potential investor!" etc.
It might help to reframe this conversation from one where you're going to tell them all the things that aren't working to one where you ask for help with the things you think aren't working. If you don't want your co-founders to be defensive then you need to be vulnerable -- probably much more vulnerable than you're comfortable being.
Good luck. Welcome to startups.
My best advice is to be direct, and take care of yourself personally, especially physical and mental health.
If your co-founders are doing things wrong, perhaps you can do some research into their side of things and figure out how to do things better. Teach them things, and learn together. Do their jobs for them if you have to. Since they are family, perhaps they will be easier to persuade?
Either way, communicate! Put it all out there. If, even then, things don't seem like working out (i.e. the other 2 don't see a problem that needs solving), then leave.
As for what you do next, don't start a business for the sake of starting a business. Do it if you have a vision for what the world should look like. If you believe in the vision strongly enough, nothing can get in the way of you building the product/company to fulfill it. If not, don't fret. Working for a corporation is not the end of the world.
Find a place where you will learn something. There's a nice post by Garry Tan about learning vs. earning. Read it. http://blog.garrytan.com/lessons-from-2-5-that-i-wish-i-knew...
There are two big warning sign that things will go wrong in the first paragraph: if you end up doing business with family members, only do so if: (1) you really value their technical skills or (2) if they have real objectively proven business skills and proven ability to raise money or finance from their pockets or (3) if you've done business with them before and it worked out well for you.
...if neither (1), (2) or (3) is the case, stay tf away from any business with family members because, when shit hits the fan (and in the OP's case it has!), you will not be able to do what you have to do in order to save either the business or your professional life. But again, even if one of the three points is valid for you, don't start an IT businesses with family members - a corner-shop restaurant, a local racketeering mob... maybe... but not in this field unless they also have good technical skill (you already have enough tension between technical and non-technical cofounders in a regular startup, you don't want to put a potential propane tank on the campfire too).
Have you actually launched? Are you close to launch? Real sales and real feedback from real customers is really the only way to validate what you're doing. A year is a long time to build something without real customers - if you don't have customers who believe in the product, there's no reason you should either.
Take a small break - Focus on the present parameters, analyze all your options (other than giving up), give it a fresh look. One can make very bad decisions when emotionally compromised.
Be honest with your co-founders, and it seems that you haven't been speaking to them candidly.
Ask for a salary and set a deadline for them and for yourself. Beyond that just leave. I would not expect a market-linked salary at a startup , but I would definitely not like to work for free or with a salary that makes me struggle with my basic financial requirement.
Remember, you made an investment - in terms of time and effort - Calculate the financial value of the time you spent (like what you would have got in an average job otherwise). Check if you are getting fair enough equity - for all your investment
You feel like "giving up", but if you have to do that, do it gracefully - give it very detailed attention, Work out all options in a comfortable timeline - and may be then if still doesnt look good - leave.
Believe me, "i gave up" will stay with you for your lifetime, if you din't try all the other options before that.
It looks like you have invested time and money in this opportunity and you ask yourself if it is likely to pay off. The intuition to stick to it even if there are hard times does actually have a sensible foundation: If the business took off in a couple of months without you being part of it, you would probably regret having left it.
So what you really want to evaluate is the likelihood of the business taking off within a timeframe that's tolerable for you. Startups have the property that not all progress is immediately rewarded. Some companies have to go through tough times until they hit gold. You now have to decide whether you think you have such a company or not.
As you obviously have more knowledge about your own situation/company than I do I can't assist you directly in that decision. However, I remember reading a rule of thumb that if a startup does not have any significant traction (users or customers) 1.5 to 2 years after its foundation it is likely that there is something wrong with the business or product. I think this may have some truth in it.
"I think my co-founders are idiots, that they fouled up their side of the deal," Ask them to give up some of their equity so that you can use it to motivate a replacement candidate.
"but I feel as though I've invested too much time and energy to bail now." Ouch, you're fucked. NEVER EVER let past mistakes ruin your future.
How about making a list of all the things you learned during this venture and a second list of all the things you can do in the future if you sever ties now. That way, if someone asks you in the future, you can explain on a positive note why it was the right thing to go.
However, all of these business projects also involve a lot of luck: I was once working on and off on a project for 3 years and gradually losing faith in the business model. And then all of a sudden, the project was reviewed without my knowledge by a local newspaper. We got a huge spike in traffic, sales started to explode and throughout one week, i was more than rewarded for all the hard work.
If you have launched, then you need to have a talk with your other founders. Not about raising money (because that may never come).. but about the financial goals of the company; revenue growth rate; profit; etc, etc, etc. At what point are you going to meet those targets? At what point will there be money for a paycheck?
If the only financial goals you guys have is to raise cash for a project that will never pull in a dime, then forget it.. it's not a business.. it's a toy. Businesses exist to make money. You should have a solid plan for how you're going to do that from the very beginning.
"I think my co-founders are idiots". What are your expectations of them for the future. Do you see them becoming geniuses? Staying in with the expectations that a bad player will become a good player is an insane risk for you.
If this start-up becomes big, how stake in the company are divided will become a huge pain point. They are going to want more than they deserve. I've been around plenty of people who are all talk and heard many horror stories. I'm fortunate not to be burned but I've made a strong effort to surrounded myself with the right people. I'm telling you this to minimize mistakes that may take a huge portion of your time. Time is the most valuable thing you have so spend it on projects and people that are worth it.
You either own enough of the company so that you can decide to do things your way or you start demanding paychecks.
You make it or you break it, and when you're no longer so sure then it's the latter.
I think your biggest problem is that you are clearly focused on your troubles, your finances, your work on the product.
To succeed you're going to have to focus on the needs of your potential customers which, experience tells me, is most difficult to do when you are in a difficult situation. If you have a long enough runway, I would suggest taking a few days off, then spending some time away from your cofounders and the computer and talk to potential customers. Do that for at least an entire week. It will completely change your perspective.
If your runway isn't long enough, get a job and work on this on the side. There are no shortage of ideas and regardless of what others tell you there will be another opportunity to pursue a startup and chances are you will be a lot wiser about it the next go-round.
What are your thoughts? Are you interested in participating.
It's a typical "sunk cost" decision. From the tone of your note I would guess you would answer you should leave.
This sounds like you'd be okay if the business model was different. Tell them that either the business model changes or you're leaving. Then it's up to them whether you leave. You may or may not be able to negotiate interpersonal problems.
Economics would tell you to ignore sunk costs. I sympathize with your emotional attachment to this project and like you, I would feel like I was failing if I "gave up" on the last 15 months. But that isn't what you're doing - you're just facing facts. If you can no longer make ends meet, you either need take a salary, or leave. Be honest with your co-founders: remind them that you were willing to take a huge gamble on the business and that you've gone 15 months without a salary. Give them an ultimatum: either they make it possible for you to get a salary now, or you go on your way. This way it's not a unilateral decision to leave, and if it's possible for you to stay, you get that chance.
Again, I sympathize with your situation and I wish you the best of luck!
You say that you've become a better programmer, and are proud of your product. It's the business model that stinks, right? If product is all you care about, why aren't you working on an open source project? You'll constantly get developer reviews and user feedback and can build a truly fantastic product. If business model/ funding is secondary ("let's just pull in a couple of idiots who'll take care of it for me"), you really shouldn't be starting up.
Okay, you're already here and want to know what to do now. Cut your losses and get out. Now. Get your shit together and figure out what you want to do.
If they are idiots, then the only rational choice is to cut your losses. The size of your investment has zero impact on their ability to turn things around.
You had bad luck and I surely do not know all the info but if you do not trust the monetization model it might be because it was never clear from the beginning, and do not forget, startups are companies and companies make money.
If you feel so frustrated just jump form the ship before it sinks, i have shut down startups because i didn't feel we would be able to make money (luckily we were always very early stage).
Saving yourself is always better than collective suicide.
Go be an employee at a startup that's a real business. A real business is a business that's established enough to pay you a fair salary and benefits.
It should be a job that you enjoy, and similar enough to what you're working on now that you can apply your experience. The people in charge should be businessmen who understand that cash needs to flow in order for this to be a real business.
At this point, you've worked with clowns long enough to know how to weed them out. During your job search, a lot of clowns will try to justify not paying you a decent salary. You've already been there, and know that a business that can't pay you isn't a real business.
This would send a clear message to them, too : your project is not my main one anymore because I can't get a living from it, and you're about to loose me.
You can then put a stop on new features building and only focus on bug fixing, until actual money is raised.
If they finally succeed, you can easily stop freelancing. And if they don't, you will have made contacts that make it easier to find a new job not on the corporate side.
If you can't fix the problems, leave. Don't fall into a sunken cost fallacy. Sometimes losing time and/or money is just a part of doing business. You took a risk. Risk is a part of life. But you should also learn to recognize when to cut losses and move on. You should sit down, decide upon what it will take for you to leave the company, and stick to the decision if it comes to pass.
Looking ahead, you don't like your plan or your partners. I don't know how much of the IP is yours legally, but you can try to find a new partner or work on your own if you strongly believe in the product.
If you want to quit and don't want a "normal" job, consider going back to school. You might be able to quickly patch some holes in your education and meet potential cofounders for new projects.
One quote I like: "when all else is lost, the future remains." Good luck!
Move. On!
Your founders aren't necessarily idiots. Sometimes businesses fail due to a myriad of other issues, including market timing, product-market-fit and more.
This one failed. That's OK.
Time to move to greener pastures. No, you are not abandoning anyone. This business is dead. Unless a pile of cash shows-up and a major pivot happens it is likely not to survive. I've seen businesses implode even after getting piles of cash thrown at them. Money doesn't magically fix it.
Go find something that appeals to you and make some money.
I have had my share of rueful experiences on the job or off, and the anxiety and stress regarding it slip away when you start making decisions and GETTING OUT OF THERE!
1) If this is your life and soul then find a job to support your self and keep working on this startup. Words like 'I can't imagine working for a big corp' are not going to help you at anytime in your life. You work to make your dreams come true.
2) You haven't been paid in 15 months, so what? Your co-founders haven't either. It's been 15months you should have already launched your product. It takes a team to get to where you want to go, stop blaming and start doing.
Sunken cost principle. Basic psychology is keeping you in a place you shouldn't be. Every day you'll have invested more,and it will only exacerbrate the issue. You said you don't like your cofounders. That should be a huge red flag right there.
If you can't carry on without them, you should find yourself a nice job and start plotting your next (successful) startup while you save.
Try to find some balance, dude. Go running or do some yoga or try to eat better.
http://www.scribd.com/doc/4757293/Crunch-Pointthe-21-Secrets...
I don't really like the author but this book has some useful insights when you are caught in a situation like yours. Hope it helps.
Rikard
this is all in your head and they're using it to keep leverage over you.
Well, obviously they aren't, otherwise you wouldn't have founded the company with them right?
You can't call someone an idiot just because he's failing, or you'll be called an idiot yourself when you fail, too. Get rid of that notion.
That sounds harsh, but it's the truth and you've recognised it yourself. Forget your investment; it's gone and it isn't coming back no matter how hard you try.
And by non-science, also include cultural science or political science.
I remember when we founded our first startup, it was three guys: the programmer (me), the business guy (a friend of mine), and our "account man" (an acquaintance of ours) - all equal shareholders. Shortly after founding, there was a discussion about having company cars. The two business guys wanted BMWs, and I was to get some cheap Japanese mini car. When I asked how they came to that idea, they explained that I was only the programmer and I could get by with basically nothing, whereas they insisted they needed BMWs for their role in the company. They also said, and I kid you not, that they were from wealthy families and I was not, so it seemed reasonable to them that everybody needed to keep their rightful place. Needless to say, I shot this down and shortly afterwards, the account guy left. It was for the best. Who knows what would have happened if I had let them get away with this.
Self-entitled, hypocritical, non-technical entrepreneurs. There are probably a lot of good people with non-technical qualifications out there, but it's easy to suddenly find yourself working with the bad ones.
Had a chat to them, they've talked with several hundred startup founders now I assume. Great stuff, someone fund this please btw? :)
If you don't have an IP clause in the contract, take the IP with you.
Is it possible to go at this solo, focus the product on the consumer, and do some customer development?
Good luck.
Don't throw good money after bad money.
This is dangerous thinking. It's never too late to cut your losses. If you are sure this will not work, just move on.
Just cut your losses. The blue collar business people are lying to you. Just get out!
Even if you guys do make it, your environment is poisonous to you now.
Get an income. Take a vacation with your girlfriend as soon as you can.
Raising VC capital seems to me like a bad thing to rely on.
I spent 6 years co-founding a startup (though because of my age I was never recognised as a founder). I put so many hours into the software, evenings and even some weekends. The codebase was almost a work of art, built for the long term. And the business would have scaled up with the system I had built.
The directors however were clueless. For 2 years they didn't have a clue how to sell the product I have built. Even though it was clear as day to me how to take it to the market we were targeting. Eventually they cracked it and we started selling lots and, at the time I left, the firm was doing £1mil in revenue. It's probably a third higher by now.
It was my first job out of Uni. and in hindsight I was a bit naive. Though not entirely naive as I remember having many thoughts through the years thinking that things "didn't feel quite right". Something was off. I was putting in all this work to build an awesome product. And the directors/sales guys were putting in only a fraction of the effort, and always far away from hitting any high notes.
I learnt that one of the directors was siphoning out money of the firm into one of his other companies, through dodgy service contracts between the two. It seemed every month or two he'd start saying we're struggling to pay the bills even though we'd just made £60k that month on new customer sales alone. This was a 4 employee company making 60g's most months and it was just so obvious all was not as it seemed on the books. I once calculated the firm was making a clear £300k profit and yet I never saw a single penny of that through a dividend. Not even as a bonus.
Eventually I realised I could not stay there any more, despite having a small shareholding. I told them a year before I left that unless something big changes in the way things are run then I shall be leaving. Possibly a stupid move in hindsight as this pretty much put the nail in the coffin of my relationship with them and of course I didn't see any salary rise that year, not even inflationary.
I left on good'ish terms, even if one of the directors started an e-mail argument (a "see you in court" type affair) with me a few weeks later accusing me (falsely) of secretly starting up a rival company. Ludicrous.
I'm still recovering mentally from the whole experience. Obviously what I've shared here is barely a 5% of what went on. Some day I'll write an epic blog post about it I'm sure. I certainly went through some dark periods but I'm on the mend now and have learnt to channel it in such a way that I learn from it and to make me better equiped for the next time I do a startup.
The way I see it now is, those 6 years at this startup weren't a complete loss. Sure I didn't get to cash out my shareholding (though maybe some day I will, as the firm is still successful thanks to the product I built). But I was living at home and taking home £40k which is a lot for someone the age that I was. I saved pretty much 85% of my money and ended up with a huge deposit to put down on a London apartment. I moved to London early last year and have moved on with my life.
I would encourage the OP to break free. Don't take a month off or anything as that will only make you feel worse. The best thing you can do is get back on the horse, get a new job, maybe even move town/city if you have to. You need to press the gas pedal on your life for at least 6 months, that's what I did, to help you move on and forget. The worst thing you can do is quit the job and let off the gas pedal. That could have dire consequences for your mental health.
Hope this helps.
Don't let your co-founders know that you're doing this. They probably see those VCs (for rejecting them) as an enemy. They are, of course, the opposite. They did a really good thing by pushing you away from a bad idea. Not everyone in that world has the courage to reject someone (as opposed to delaying indefinitely, which has the same effect but is less honest). You should reach out to them for general career advice and see what happens.
Regardless of whether the VCs help you, it's time to wrap up your startup. Do any documentation work that's needed, get your specific equity amounts in writing (founders will often get resentful and try to steal your equity if you don't, and you won't get much sympathy from the courts if it's just a verbal agreement; that means you fucked up). Try to leave on good terms so you can keep a good reference, but don't hold high expectations because usually a startup breakup causes one side or the other to burn the bridge outright.
Good luck! This is not an easy thing to do. When you leave as a founder, it feels like defeat-- it's not just changing jobs, but it feels like you're admitting that you don't belong in charge. You can't let that get to you. You made some bad choices-- it sounds like your co-founders were not made of the right stuff-- but you've learned a lot, and now it's time to recover.
If you can get consulting work or a really good salary job (i.e. one that will improve your career, not waste your time) then that is the best way to move forward. I wouldn't recommend trying another startup for a few years. Startup failure is really hard to recover from; you need time and a low-stress environment.
VCs all know each other. If a startup's technical founder goes to a particular VC to let them know they're thinking of bailing, every other VC in the world (effectively) will have access to this information, and that company will never be able to raise funding.
If you're really committed to leaving (which is fine), I would cut ties with the company first, then start asking around. At least that way you don't leave the other founders in a weird limbo state where they effectively can't raise money.
Tell the other founders why you're leaving, and offer to introduce them to other technical people that may be interested in a consulting engagement / employment when they raise money.
I do, however, agree with the part about getting the paperwork in order. If they are successful in raising money after you leave, the other founders and future investors will likely do everything in their power to dilute your equity disproportionately. It would be worth the $500-$750 to talk to a lawyer and make sure all of your ducks are in a row.
The author appears to have marketable technical skills and should be able to spin his startup experience to his advantage. There's no reason he can't resign professionally and seek new opportunities without involving any of the people connected to his current company.
Alright homey, been in nearly your exact shoes- echoing the remarks of others here's what you do: OUT OUT OUT OUT OUT
You've been sold a bill of goods and it hasn't delivered, these startup ventures in some ways are "supposed" to hurt a bit but not like this. Get out yesterday and be firm with your decision.
It is soooo much easier said than done (esp on an internet forum) but here's a coping mechanism: 1) remember you absolutely do not need to line up another gig in order to leave this one- this sounds like a loser/sucker bet and you can fall back on side gigs; 2)The "family" aspect makes things tricky but luckily you can work or not work wherever you damn please.
The crucial thing is to stop the hemorrhaging ASAP, get the hell out pronto.
Caveat: Even if they come up with a way to pay you a BS-y salary, without knowing the specifics of this situation, from what you describe I still say it's time to hit the road and get on with your life and other ventures.
I'm sorry you are having a tough time but you need to either 1) have a hard talk with your co-founders about your business model. present facts. make your case. they will listen.
or
2) if they dont, walk away and start something new. you mention you are a few years out of college. you could also go take all the technical experience you have gained over the last year and get another job. Make a decision on your own.
But really, the notion that a bunch of internet strangers will be able to give you some miracle advice is absurd.
Yeah, isn't it awesome? There are sure worse ways to deal with difficult personal questions.
How did we do it before the internet and crowdsourcing? Oh yeah, there was a column in the newspaper called "Dear Abby". For the entire American syndication, she handled about two questions a day.
> What happened to just talking to people or making tough decisions?
I think he has been 'talking to people' because they've written him some checks.
While not miracle advice, I cannot think of a better venue to ask startup-related questions. I don't know anyone in real life, none of my friends do this, etc. In contrast, a substantial portion (if not the majority?) of users here have been part of a startup, and have firsthand advice.
Sure, it's not miracle advice, but the fact that these are strangers on the internet is not sufficient to discount the wisdom that many here are willing to share.
Obviously this person wanted some advice on their situation while remaining anonymous. I don't see a problem with being able to engage the community without having their name attached to it until they're ready to sit down and have a frank conversation with their co-founders.
> But really, the notion that a bunch of internet strangers will be able to give you some miracle advice is absurd.
I'm not sure how asking for advice is expecting "miracle" advice. There is a difference between the two.