176 karma · joined July 22, 2010
Fred thinks his returns are trimodal, and that he plays mainly in the middle. Looking at your chart, he seems to be 100% correct. He's got one exit at 70% annual returns, but he makes the bulk of his money in the middle of the range.
If you want to build a business, then you need a real plan for sales and marketing. Doing these well is just as hard as writing code. It takes a lot of careful thought, and it often takes money.
Even if you got your one-time appearance in TC, you'd find it wasn't enough. You need a sustainable strategy for acquiring customers. You need to calculate that the money you get from each customer is ultimately more than it costs to acquire them. Depending on your market, you may need a lot of money up-front to build a sustainable business.
These things don't take care of themselves. There's no simple one-time solution like showing up on TechCrunch. If you want a business, you have to build it.
If Zuckerberg had told the Winklevi he planned to quit and start a competing site, then there would have been no lawsuit. The harm was intentionally misleading them, so they wouldn't find a replacement programmer to finish their own site.
Your best bet is to be aboveboard, and get people to sign off on whatever they agree to, so they can't come back later with a changed story.
The exact numbers depend on how often you test the confidence interval, but a multiple of 5-10 is for early measures will usually give reasonable results.
E.g., let's say you ultimately want a 98% confidence interval (2% chance of error). A 10x improvement is a .2% change of error, or 99.8%. Depending on how often you are sampling, an early result with 99.8% confidence can be equally accurate as a later results with 98% confidence.
As long as you decide on a minimum number of trials to make a decision, it's fine to look at the data as it is accumulating.
It wasn't a random failure or a sudden spike that caused the crash -- it was completely predictable growth. Foursquare had already experienced the problem once, and they had solved it. All they needed to do was monitor their growth and iterate that solution.
Sure, Foursquare could have had a better sharding algorithm, but that would only have put off the crash a bit longer. This is a very basic failure -- not monitoring a system that you know is steadily growing.
I would guess your potential employers are as unhappy about the situation as you are. It's no fun to lay people off or rescind a job offer. It sucks almost as much as being on the receiving end.
If you want to work in a startup again, don't hire a lawyer, and don't make a huge deal out of it. There's only a miniscule chance you'll recover anything significant, and you will certainly incur ill will.
If job stability is very important to you, then you should probably stay away from smaller startups, where positions (and paychecks) can be very unstable.
On the other hand, given that the company hasn't really succeeded so far, it's not clear that your efforts to date are worth all that much. If the company goes forward, the real value creation is still in its future. So you're not really being screwed over, you're getting fair value for what you've done. The tough part is recognizing that even though you've put in a lot of effort, and invested a lot of emotion, the results so far just aren't worth that much. You sort of recognize that by walking away. But now you want a share of what the other founders create in the future, which isn't fair. You only deserve a piece of what's been created so far, and by your own description, it doesn't sound like that is very much. You can't have it both ways.
Set up a board of advisors for your company, and try to get 1-3 successful entrepreneurs in your field (or related fields) to serve on it. Give them a bit of equity. Talk to them individually, but also try to get them all in one room at least once.
You can reach potential advisors through networking events, through service providers like lawyers, and by just emailing them (repeatedly if necessary). You might want to start by hiring a lawyer or accountant who is connected in the community, and asking for help with intros.
Among other things, your board of advisors will help you understand the type of investor that makes sense for you. If you're trying to raise $250K to ramp a business up to a few million/yr, then odds are no one on Sand Hill Rd will be interested. But that doesn't mean it's a bad business -- you just have to look elsewhere for investment.