Why our startup failed

Yes, I've heard (and experienced) most of this. It's still good to hear it again, though, and being from another country we can learn that some mistakes are universal.

EDIT: Joel's Camels and Rubber Duckies[1] is essential reading for how hard it is to sell enterprise software. Price it free, cheap, or dear. Not to say that there is no hope in selling to enterprises, because lots of people are very successful doing it, but you need to know how hard it is before you start.

[1] http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...

From my experience, the problem is that when your strategy is chasing big customers v. small ones, the customers you often end up with are the worst of both worlds - they are large enough to act like big customers (want contracts and features outside the scope of what you are working on), but will only be looking to pay prices that small companies need. I worked at a company in that spot for a while. In SaaS, sales teams can play a big role, but until you have a pretty decent cashflow, it makes more sense to me to have them focus much more on inbound sales (and account management) than outbound, which is a very different sales model. Eventually, once you hit a certain size, you probably need a real sales team, since that's what will close the real big fish. But before you go after them, make sure you have enough cash flow that your boat doesn't sink before they can reel them in (to continue the fishing metaphor).

When I worked at Pearson, I was often at the other end of the transaction in these situations. We required LDAP, hosted local admin, and a few other enterprise-y features that don't play well with cloud startups. But it was essentially window shopping.

I would often interact with a startup where the sales guy was fired on the other end because they just didn't understand that we were doing a 3-6 month competitive technical evaluation (in addition to our more important day-to-day work) after I'd clearly explained it a few times. No amount of "sales" will make up for a lack of required, costly-to-build features. Also, the answer to missing features is rarely ever "wait for them to be built."

Agree. Proper grammar and editing of your own content also might help.

The author mentions quite a few times how he/she ignored lots of problems, from the very beginning -- the CEO was far too full of buzzwords, etc..

This was also apparently a product that could gather a complicated mass of data that would be valuable, but difficult to use.

I'm not sure of how it should balance mea culpa with "he did it", exactly, but the author certainly doesn't come across as free of guilt over the failure.

Fair point, especially as I thought I have been acknowledging my mistakes enough. They are concentrated in the "Ignoring problems" part, mainly.

I blame myself to have ignored the problems, and not to have acted on them. The overconfidence as well: I thought we would know soon enough if we needed to stop. For a zero loss operation.

If we follow that direction, I would have never accepted to join the project.

I have been naive enough and my lack of experience did not help me to react properly, and in time. That's what happens when you play with grown up people, on your own and without requesting neutral advices ;-)

Also, I have challenged the CEO (and his partner, she was a cofounder and the head of marketing… yes I simplified the problem not to report the failure on people but rather on the behaviours)… it is just it is technically very difficult to trigger something when you have 6% of the shares, and when all the powers are concentrated in one person. Which means that if he wanted something, he could have it. Even firing me for no real reason (when you have an R&D gov discount in France you can fire anyone related to R&D).

I did not relate it much as well but everything was fine on the technical side. At least the process and the everyday life. This, has been my best work experience: we open sourced/improved Node.js libraries as much as we could (and eventually became friend with the sigma.js author).

Maybe it was useless but surveying the whole insurance market through online opinions mining for a specific country in less than two day is somewhat valuable for whom is able to pay you for those data ;-)).

PS: I am not a native English speaker so any feedback to correct the mistakes are welcome. There is a "Contribute" link at the end of the article: open a PR ;-)

I came in to say this. "Oncle Tom" translates to "Uncle Tom" in English, and in the US it has an extremely derogatory meaning towards African Americans. It's essentially a "black man that sold out to the White Man".

The name choice probably wasn't motivated by this, but it's an unlucky choice if the goal was to grow in North America, similar to the Chevy Nova, which in Spanish was equivalent to "No Go".

Maybe the guys first name is Thomas and he's a proud uncle?

Well, "Oncle" translates as "Uncle" and Thomas is my first name. It is a French pun I chose 10 years ago; and I definitely not meant to promote slavery or whatsoever. I am more a humanist kind of person. Sadly at the time I missed the point it could eventually be pejorative in North America (and probably elsewhere). Especially as the book is about getting access to freedom through hard work. A beautiful outcome.

"Oncle Tom" sounds friendly and familiar in French. You could read it as "Bro Tom", a guy you can speak and what with easily.

The header picture is a picture of mine depicting a french fisherman graveyard located in Iceland. While the company was heading to its own graveyard, I was visiting one. This is how to read it. > https://www.flickr.com/photos/the-jedi/8468239532/

Well, English is obviously not the author's first language. Most of the sentences had either spelling or grammar mistake.

Well, thanks for all of responses especially from oncletom. I of course know the book but I was curious about the thought process in choosing the name. I didn't want to assume the worst.

Unfortunately it won't play well with Americans despite your honest intentions. I would find it hard to introduce you to a contact if you used that domain for email.

This. A thousand times this.

This is exactly the comment i was looking for.

Yep that was not the point I wanted to express (what did the company do). I shallowly explained it as well: we hardly described our own product, making it difficult to read from a market perspective.

As a sentence: Web opinions miner and network of influences analyser.

As an example: national market study on insurances based on expressed opinions on the Web, collected in two days, classified and weighted on various criteria relative to the business requesting the study.

Hope it helps.

Classic example of not understanding the customer. It's selling analysis to marketing departments don't have the time, budget, or expertise to act on this kind of broad analysis.

It's really hard for a young startup to turn down big potential customers, so offering the first taste for free is reasonable, but it's equally important to then quickly discontinue the free trial and leave that customer wanting more.

Yep this is crazy.

I think this is tight to the personality of the guys allowing the expenses. In that case, the "I want to make sure you don't need my money" investor advice makes a lot of sense: they want to make sure your head is not going to burn because of the euphoria effect. Yesterday you had 0, today you have millions.

On another scale, you have people unable to manage a daily budget. This is the same on a (wrong) business scale.

But agreed, this is lame.

83k euro/month burn rate it's definitely a lot for a startup, but i KNOW it can be like that or even worse.

500K isn't that much money if you're not supplementing it with revenues. 11 salaries burn cash fast if you're paying market rates, even if paying 5k per month per employee then just on salary costs you only have 10 months of runway. Thats nothing. This team should have been leaner and product focused with that 500k and their goal should have been a product that they could spin into a second round of funding.

They had a pretty big team for the money. Two marketing people at a company that small? I found that a bit strange.

I've seen a lot of "blog/articles" use the same approach. It is bizarre isn't it?

I've never seen a company do that, though.

We agree this should be the case. And eventually bank account reports should be available to anyone in the company as long as the details do not create a possible business threat.

On the other hand, I requested the account details but never got access to them. What do you do when you insist and get nothing? At some point you stop asking.

Considering the structure we had in the company, I am not sure there were legal obligations for the company to deliver the accountancy reports. If the CFO and CEO do not want to share the information… I never found a legal way to oblige them to do so. The CEO owned 52% of the company. Aka `root` access to the machine.

Maybe I am wrong on that part, feel free to add anything I have missed (I do not pretend to know everything, I just wish I would have know all that sooner).

Interesting question, as it is a regular debate with the US/FR startup ecosystem.

Hiring is longer than harder: I already knew and contacted directly some of the engineers I wanted to hire. I also used GitHub and requested candidates to apply through a Pull Request (https://github.com/Dijiwan/Jobs).

I am not based in the US, and if I had to hire people there, I do not have enough step back to judge if I could have successfully operated the same way I did.

Most of all, the engineers hiring process was rather 1) an individual trust, 2) a cultural fit (we share the same values) than a "I want the most expensive guy on Earth". I value the individuality of people equally to their skills. I think this is harder to achieve in a more money-driven environment. Not being located in Paris but rather in a chilled out city like Bordeaux created an emphasis on the "we want to work and enjoy a good work/life balance". Working on the grass, at the coffee or a nap on the river bank while being able to have a 100% JavaScript codebase when it is your favourite language, this has no money equivalence ;-)

We had more problems with other roles, but I assume it is because we were not clear enough on the expectations and for the reasons explained in the blog post.

Hiring is a lot of paperwork. Firing is a lot of paperwork. Jobs are sacralised in France and this is normal from an historical point of view: people fought for that. A lifetime full time job was the Nirvana of the Industrial Revolution.

Hiring someone should be a huge responsibility is most businesses: you not only deal with money but with individual's life. So you need to make sure you generate enough revenues to hire someone. It is an ethical debate, and cultural. I do respect individuals, whatever role they have in the company, and I want them to be able to be happy at doing it, even if it is not their dream job.

What was stupid on the business plan is the "hirings objective". They preferred us to hire 8 average engineers rather than 4 excellent ones. At a bootstrapping stage, I bet on reliability and efficiency. It is easier to scale conversations with 4 people rather than with 8.

What I think is wrong in the french public investment is they care too much about job figures and not enough about the company sustainability. Whereas I think in the US, investors care too much about the money and probably not enough about people (this is how I perceive it through the Internet lens, so certainly there is a bias in my opinion). CEO are still perceived as bank robbers and slave masters. We like national companies to succeed but we hate so much people earning money. Maybe because there is an unfair wages balance between "high value" profiles and other people.

I wish it could be easier to be trained at creating companies, to be promoted and to be educated at creating a successful business. For this, I think US are way better than us. To market and to define a product as well, the US are far better than us.

We did not more money: we needed to make more money. We might have needed more money in the US, simply to scale with the salaries expectations (and to provide benefits, which are provided by the government here in France through the tax payer system; it linearise the cost over the entire country rather than creating an auction system for equal benefits coverage).

The failure we had was human: wrong persons at the wrong place making wrong decisions (including myself, except I think I did my leading job well; the cofounder one has been my weakness). The failure we had was a product design: we had a super powerful tool and we did not know how to sell it, and we had the wrong persons to sell it.

We were pretty lucky (and probably worth it) to get that much funding. It took us one year (a year you have to fund on your own because you need to pay your bills meanwhile) to get it anyway. And investors have been fooled by some of the founders as we did.

So no, I do not believe the french system helped: we had access to free legal support. The only lie we discovered is a continuing contract in France does not protect that much when your employer is not able to pay you. In that case, you are prisoner of a system rather than protected by it. This is wrong.

I do not know if it provides all the details you expected to have, so feel free to question me more about that :-)

i think public investors means the government in this context.

Very good question!

The process has been initiated way before (a year before actually). It took 4 months to get the money because the business plan and everything has been made for the company launch.

Think of:

1. 2010: the project initiated with the preparation of the business plan with public funding in mind;

2. september 2011: the company launched because the funding project has been audited and validated, which means 99% chances for the funding to be approved;

3. january 2012: the money has been unlocked.

Does it make sense?

Oups sorry about that. What is your device config? Because so far I tested only on a Nexus 5.

"Glad" to read this. Obviously my English can be improved. I hope people are not bleeding too much from their eyes ;-)