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Comment by twic | Hacker News Reader

We're talking about this like it was a failure. This doesn't look like a failure to me. Look at what they write:

> we believed by building a far superior product, and being creative about signing up users, we could turn long-distance carpooling from a niche activity to a modern mode of transportation.

> we did succeed at growing steadily (25-30%/mo), creating an Apple-featured iPhone app, building a userbase of 30k+

> we’re able to leave the Ridejoy website and iPhone app up and running for a while, until it starts declining in usage or requires too much maintenance

They set out to make carpooling great. They did it, and shipped the greatness to thirty thousand people. The service is still running.

They didn't make a fortune (or make their investors a fortune) doing it. So what? It is only in the utterly demented Silly Valley startup mindset that this is a failure.

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The problem is the opportunity cost of time. If a talented technical founder could make $200K per year working somewhere else, then the opportunity cost of building that company (after 2.5 years and with 3 founders) is $1.5M.

It may not be a failure from the ecosystem / societal perspective because a new idea was tested and discovered to have some value to the world, but the company ended up being worth $0. The founders are now saddled with a bunch of debt.

It's like you go all-in on a poker hand, and then lose to a better hand. Did you lose? Yes. What if you had fun playing? It's still a loss.

What debt do you think the founders took on? Their company took investment, but that's not debt, and it's certainly not individual debt.

With your attitude, nobody would learn to play poker, because nobody ever wins the early hands. These guys clearly learned a hell of a lot, and that was likely worth more to them than whatever net profit they could have turned on working a different job. That's how I've always felt about my failures, anyhow.

Re sources of debt: there's the incurred costs from bootstrapping. I quit my job to start a company in August 2010, and didn't start paying myself a salary until June 2011 after we completed our angel round (though we charged expenses to the company from Jan - Jun 2011). I think my co received funding a lot faster than most other YC founders who bootstrapped for longer before getting into YC or raising an angel round.

That's results-oriented, both in poker and in start-ups.

How did your hand fare against your opponent's range (and not just the hand they turned over)? If it fared well, you likely had good expected value on the hand.

Same principle applies to startups.

In poker, though, the stakes are smaller and you get to play many, many more hands to ease out the variance.

I appreciate the vote of confidence and of course we all choose our own definitions of success and failure. As a "venture backed company", the expectation is that we would build a business that will ultimately return 10x the investment. That seems like a lot but the investors also know that many of these ventures will ultimately be worth nothing.

Our goal was to build a large, thriving and sustainable business that profitably served lots of people, and eventually have some kind of exit event for our investors. Similarly we wanted to offer our employees an opportunity to build this business together.

We weren't able to do that and it's not Silicon Valley, but the expectations of the people who made a bet on us either with their money or their hard work that we feel we've let down, even as we know that most startups do not achieve this goal.

> the expectations of the people who made a bet on us either with their money or their hard work that we feel we've let down, even as we know that most startups do not achieve this goal.

I'm sorry to hear that you feel like you've let people down. That's a terrible way to feel and live your life. Investors and advisors back you early on because they believe in you. Embracing that philosophy is liberating, and actually, allows you to take more risks and become more success (and happy) from my experience.

I'm sure they'll be supportive of your next venture.

Thank you for sharing your experience with everyone. I'm sure this wasn't an easy blog post to write.

I think it's healthy to worry that you've let people down after something like this. However much you give people the warning about risk, you all want the thing to succeed, and you're all disappointed when it doesn't work.

I agree it would be bad to worry about this indefinitely, but early on I think it's normal and reasonable. If I were one of their employees, I'd certainly want to see them express that, so that a) I know they're decent human beings, and b) I can absolve them of their guilt on my account. Their being concerned allows me to be generous, which helps both of us.

I'm not sure on your specifics (when and how much your raised) but early stage VC's are hoping for more like 100x. Series B and C maybe 10x and 3x respectively. Anyway, your point is taken. It sounds like you discovered a potential lifestyle business as a funded company.

Yes they definitely built something cool that a good number of people found useful. So I assume the problem was revenue? What was the revenue model in the first place? Not sure the revenue is there on either side when the average ridejoy user is probably pretty price sensitive and also has a good enough free CL alternative. Hindsight is always 20/20 though

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