Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Why did your startup fail and what did you learn?

news.ycombinator.com

Post reply on HN
Print view View original

91–100 of 453 posts

Re: Ask HN: Why did your startup fail and what did you learn?

#91

Post by owyn »

arkades wrote: post #63

Our uninsured CEO/cofounder developed a chronic illness and embezzled cash from us to pay his massive medical bills. Killed our runway, which we only found out after we hired an accountant to look into our books and find wenhad an empty gas tank. Since this was still at the f&f funding stage, none of us had the heart to go after him for it.

Wow. That's a great reason to advocate for universal health care in the US, because it lets people work for a more risky startup without having to worry about that particular risk!

Re: Ask HN: Why did your startup fail and what did you learn?

#92

Post by thanatos_dem »

shawn wrote: post #82
thanatos_dem wrote: post #60

CEO would disappear for months at a time, with the promise of returning with capital. We never really knew where he went, and he wouldn’t let anyone else talk to investors (including me, who was CTO). Eventually he stopped paying us, but promised that the money was just tied up in the parent company set up in the caymans. After 2 months of not paying myself or any other employees, the COO and I drainked the remainder…

Also leaned to not fuck with the cartels. Oh come on, you can’t leave us hanging like that! This is the beginning of the best story in the thread. How did the cartel connection form? Was your contact named Estefan? Did he have a mild accent and project an aura of power? “Bad decisions make good stories!”

Luckily, nothing too exciting happened. We were operating in the financial tech space in Mexico, trying to make lending less comically predatory (a standard small business loan in Mexico can have close to the same interest rate as a payday loan in the US).

With that goal in mind, we were targeting areas in Mexico that needed the most help. Cities with a decent small business sector, looking to grow, and having difficulty doing so. Juarez was a perfect fit, especially given that a lot of citizens have been across the border and can see how much better things can be. My parents were not amused. Then the movie Sicario came out soon after, and they were somehow less amused. But I got to ride around in armored vehicles with a security detail, so that was fun.

Really my "learned not to fuck with the cartels" lesson came from our market research. This may surprise you, but the banks in Mexico are... sketchy. Well, not all of them, but definitely a few. In particular, we were in a competing market as Banco Azteca. It appears to have since been removed, but at the time, the Banco Azteca wikipedia page described it as having "a uniquely effective debt collection system" or something like that.

Yeah, what they actually have is a motorcycle gang. They give you a loan with massive, often times impossible to pay off interest rates, and if you don't pay them back, motorcycle dudes with bats show up to collect, or take enough of your property to make up the difference.

Re: Ask HN: Why did your startup fail and what did you learn?

#94

Post by DonHopkins »

mahesh_rm wrote: post #61
angersock wrote: post #3

My own startup about five years ago (I've worked at several others, all different types of failures): Running out of money. We were bootstrapped, and the style of work we were doing had some decent capital costs. We failed for a "bargain" (less than 7K), but we had cut to the bone and deeper while trying that. Side jobs to make rent just increased stress and distracted from the business. Why did we run out of money?…

"Probably most importantly, I learned that the glorification of the startup lifestyle is a lie perpetuated by people seeking to make money from it at all levels." This I would say is my main learning point. My first startup failed because of inexperience and team implosion following incapability of generating revenue fast enough on one side, and attract favorable investment on the other. Failure could have been light…

This very much. Also Kickstarter: there's a whole ecosystem built around parasites trying to make money off of other people's broken dreams.

Re: Ask HN: Why did your startup fail and what did you learn?

#95

Post by koolba »

mrhappyunhappy wrote: post #35
subhobroto wrote: post #31

Earlier quoted context omitted.

I used to think that offering a 10% discount on invoice to clients for payments within NET30 would motivate them to pay early, but very few clients, specially those complaining about expenses ever made good use of that. Has this been your experience as well? ... and do you "outsource" your AR for a % of your invoices?

As a consultant I state that I will charge a 10% late fee for every week a payment is late. I’ve never had a late payment. I’d say offering a discount does the exact opposite.

I’m pretty sure that violates most State usury laws.

Note that I’m not referring to charging interest for late payment as being illegal. I’m specifically referring to charging 10% compounded weekly, which comes out about 14200% annualized.

Re: Ask HN: Why did your startup fail and what did you learn?

#96

Post by tptacek »

koolba wrote: post #95
mrhappyunhappy wrote: post #35

Earlier quoted context omitted.

As a consultant I state that I will charge a 10% late fee for every week a payment is late. I’ve never had a late payment. I’d say offering a discount does the exact opposite.

I’m pretty sure that violates most State usury laws. Note that I’m not referring to charging interest for late payment as being illegal. I’m specifically referring to charging 10% compounded weekly, which comes out about 14200% annualized.

Probably not. Even in states that don't exclude fees unrelated to an actual loan of money, it looks like contracted late fees between businesses are excluded from usury definitions (that's the case in NY, for instance).

Re: Ask HN: Why did your startup fail and what did you learn?

#98

Post by tokyodude »

Thriptic wrote: post #27

I was a co-founder at a SaaS health startup that ultimately failed because our team imploded. I learned a variety of very useful lessons from our failure. #1 If you do not have strong domain expertise in your target market, your co-founder must. If none of your co-founders have strong domain expertise, you are in for a world of pain. It's possible to succeed without someone from the industry onboard (and we almost di…

Will an agreement in writing really get partners to do it the way you want? I feel like that's some other issue who's solution I don't know but just writing it down won't actually make the difference when it comes to actual behavior.

I've been in a similar situation where co-founders had different goals. I used to think talking before hand and getting things in writing would have helped. I'm pretty confident now that writing would not have helped. Talking might have except that people hear what they want to hear so they all think they agreed but they all think they agreed to something different

Re: Ask HN: Why did your startup fail and what did you learn?

#99

Post by torte »

So far a few:

1) Don't spend money and time on things you don't need or will need earliest in a few months from now.

2) Regardless if you have a brand-new idea for a product or try to improve an existing product/process, you need to validate first that you follow the right path. I think a light-weight solution like the idea behing the Design Sprint (http://www.gv.com/sprint/) is a good option. Don't go off and try to build an MVP. You will waste time and money (again). Even for a simple and functional MVP you will need spend lots of time to build a frame around it.

3) If you intend to improve something existing in an industry, come up with something unique about your product first (compared to your competitors). This will help you to get initial traction. Again, you need to validate this particular unique feature before you start building.

My previous startup endeavours failed all because we/I did not follow those rules.

One time we were mostly building away because we thought we know the industry (worked many years in the same space before) and had a lot of wrong assumptions. This combined with wrong spending behavior made everything fail very quickly in the end. From the outside we just copied our competitors and even our product was superior and looked better and gave part of our business customers a much better experience, we did not attract enough customers (as in users), because there was no obvious reason for them to use us vs our competition.

In another attempt I just got too deep into the tech and totally lost focus on what I was actually trying to solve. Lots of wasted time (except for experience).

Re: Ask HN: Why did your startup fail and what did you learn?

#100

Post by koolba »

JamesCoyne wrote: post #68
thanatos_dem wrote: post #60

CEO would disappear for months at a time, with the promise of returning with capital. We never really knew where he went, and he wouldn’t let anyone else talk to investors (including me, who was CTO). Eventually he stopped paying us, but promised that the money was just tied up in the parent company set up in the caymans. After 2 months of not paying myself or any other employees, the COO and I drainked the remainder…

Why shouldn't a startup fuck with the cartels?

Because if you don’t move fast enough they’ll break your things.
Post reply on HN