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Lessons from a Failed Tech Startup

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Re: Lessons from a Failed Tech Startup

#21

Post by jorgecurio »

WJW wrote: post #8
gamechangr wrote: post #3

Sales is pretty important. I read an article where Peter Thiel said that most startups fail because of difficulty in Sales and distribution. I read over and over again the value of Sales and the need for a founder to focus on "the business side", but then I still marginalize the role of sales. I'm I broken or do we all do that???

A lot of startups are founded by programmers, who know a lot about programming but not much about sales. This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." Kind of related to the Dunning-Kruger effect.

> This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are."

ugh. this is 100% me. spent 6 years working on a hard problem. Why? Because ironically people wouldn't pay large sums of money for it and I figured that if I made it 1000% more innovative than the market I'd surely justify the price.

I sometimes look back and see how fucking naive I was. I'm a totally different mentality now. It's figuring out how to get paid and making sure you are able to CHARGE people for it. You just need to get to the absolute MVP. If it's something nobody has seen before then you don't even need to build it. Just try to sell the god damn thing before you even build it. However, if there are already established markets and competitors you can't do it without risking looking like a snake oil salesman but what this is the problem of many engineers, we view making money as evil and negative because we devalue our work, we just don't see the business value and so highly possible we end up working for free at some point our careers.

For example:

Marketer: Our software that will boost your sales by 50%.

Developer: It just scrapes data from other companies and resells you public data. You can find it on github.com

VP of Sales: Shut the fuck up.

Anyhow, I can't stress enough. Startup is 80% people and 20% coding. I've learned my fucking lesson the hard way.

Re: Lessons from a Failed Tech Startup

#23

Post by dbcurtis »

jorgecurio wrote: post #20

I think my lesson was "Don't go off to the races, solving difficult problems for people who won't pay for it" and "To us its a bunch of tables and CRUD generated on top of it. To them, its whether or not theres a free plan." and "Recognize when there is a poor market fit and CHANGE the situation. Falling in love with your own creation tends to blind you." gg startups, hello drudgery

Yes, there isn't much money in solving non-problems. Instead, find people in pain, and sell them band-aids.

In the 1980's I worked for an Electronic Design Automation startup (during the go-go years for EDA). Our CEO said: "If you asked customers to give a letter grade to their current EDA tools, most would give a "D" or "F". If we can get a "C" we will do great."

He was very right. People in pain open their wallets easily, even for a stop-gap solution. That gives you money to do the solution that eventually gets graded "B" and even comes to define "A" if all goes well.

Re: Lessons from a Failed Tech Startup

#24

Post by softawre »

WJW wrote: post #8
gamechangr wrote: post #3

Sales is pretty important. I read an article where Peter Thiel said that most startups fail because of difficulty in Sales and distribution. I read over and over again the value of Sales and the need for a founder to focus on "the business side", but then I still marginalize the role of sales. I'm I broken or do we all do that???

A lot of startups are founded by programmers, who know a lot about programming but not much about sales. This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." Kind of related to the Dunning-Kruger effect.

> Kind of related to the Dunning-Kruger effect

Interesting, applying Dunning-Kruger outside it's original scope. Good explanation for the brilliant-yet-incredibly-dumb Dr. Ben Carson.

Re: Lessons from a Failed Tech Startup

#25

Post by jorgecurio »

dbcurtis wrote: post #23
jorgecurio wrote: post #20

I think my lesson was "Don't go off to the races, solving difficult problems for people who won't pay for it" and "To us its a bunch of tables and CRUD generated on top of it. To them, its whether or not theres a free plan." and "Recognize when there is a poor market fit and CHANGE the situation. Falling in love with your own creation tends to blind you." gg startups, hello drudgery

Yes, there isn't much money in solving non-problems. Instead, find people in pain, and sell them band-aids. In the 1980's I worked for an Electronic Design Automation startup (during the go-go years for EDA). Our CEO said: "If you asked customers to give a letter grade to their current EDA tools, most would give a "D" or "F". If we can get a "C" we will do great." He was very right. People in pain open their wallets…

Is my product a vitamin or a pain-killer? Excellent question.

Re: Lessons from a Failed Tech Startup

#26

Post by mschenkel »

I found this to be a great article and can identify very closely with it. I created a webservice back in 2010. Fortunately I am still operating, although certainly not "killing it". At least not enough to go full time.

Lesson 1. Sales and Marketing. So true. I think every entrepreneur greatly underestimates sales and renvenue growth. It's easy to create "top-down" market share spreadsheets and imagine the opportunities. It just never works that way. I am starting to learn that Sales is a major part of any company. People tend to think that just because there are fewer and fewer brick and mortar stores, and face to face meetings for that matter, that sales isn't an integral a part of a company.

Lesson 2. Indeed money is important. But at the same time how necessary is it for a lot of what Silicon Valley is producing these days. Hardware and development tools are the cheapest they have ever been. You certainly don't need a ton of venture backing to create a web service. That is the approach I am taking.

Lesson 3. With my web service I never created spreadsheets with forecasted user growth. But at the same time can say growth never really took off the way I had hoped. More important to me is year over year growth.

Lesson 4. I am still running this as a sole founder... Anyone out there interested in sales/marketing?

Lesson 5. Great point. Always a difficult decision knowing what features to add. More and more I add features and have the requesting customer at least partially fund the development of it. And more often than not don't release them as a "public" features. Sometimes you have to resort to "consultingware" until your fully self-serve web serivce takes off on its own.

Lesson 6. Indeed. Never be afraid to reach out to people who sign up for your service and ask them more. Stackoverflow is a great site to "find peoples pain".

Lesson 7. Yes - you always have to keep your chin up, especially on days where you feel

It would be interesting if Ross could share some indicators on his revenue. If not, other metrics like how long it took to get the first sale, etc.

Re: Lessons from a Failed Tech Startup

#27

Post by mschenkel »

jorgecurio wrote: post #21
WJW wrote: post #8

Earlier quoted context omitted.

A lot of startups are founded by programmers, who know a lot about programming but not much about sales. This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." Kind of related to the Dunning-Kruger effect.

> This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." ugh. this is 100% me. spent 6 years working on a hard problem. Why? Because ironically people wouldn't pay large sums of money for it and I figured that if I made it 1000% more innovative than the…

Did you ever get to the point of having revenues?

Re: Lessons from a Failed Tech Startup

#28

Post by nostrademons »

stevesearer wrote: post #13
WJW wrote: post #8

Earlier quoted context omitted.

A lot of startups are founded by programmers, who know a lot about programming but not much about sales. This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." Kind of related to the Dunning-Kruger effect.

I think this is part of the reason ad networks are are so popular - you only need to drop in code and sales is unnecessary.

It doesn't actually work that way, though - ads are worthless if people don't convert, and you make them convert by building something they actually want, and you figure out how to do that by talking to them, one-on-one. So you still need sales.

Re: Lessons from a Failed Tech Startup

#29

Post by swimorsinka »

jorgecurio wrote: post #21
WJW wrote: post #8

Earlier quoted context omitted.

A lot of startups are founded by programmers, who know a lot about programming but not much about sales. This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." Kind of related to the Dunning-Kruger effect.

> This makes them able to see all the upcoming problems in the technical bits of the company, but not the upcoming problems in sales. Most effort is then spent on the technical side because "that's where the problems are." ugh. this is 100% me. spent 6 years working on a hard problem. Why? Because ironically people wouldn't pay large sums of money for it and I figured that if I made it 1000% more innovative than the…

Author here: This Comment made me seriously LOL.

Re: Lessons from a Failed Tech Startup

#30

Post by seibelj »

I just have a lower risk tolerance than a lot of people. I am totally down with creating something new, I just refuse to leave a job that pays the bills to do it. If you work 40-50 hours a week at your real job, that still leaves 10-50 hours per week to work on your own thing, depending on how driven you are, how much stuff you scheduled that week, etc. Startups are so risky that it's way better to reduce your risk any way possible.

Of course, if you go the VC funded route and want to be huge, then go for glory and quit your job. But if you want to build a smaller, steadier side business that you grow over a longer time, don't quit your day job.

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