Choose cofounders carefully, understand the platform dynamics of your industry, don't discount models that experts and the in-crowd look down upon (solo founder, bootstrapping, etc.)
Ask HN: Why did your startup fail and what did you learn?
11–20 of 453 posts
Re: Ask HN: Why did your startup fail and what did you learn?
#12I chased and successfully won a huge customer for my small and fledgling startup. I chased and successfully won a sole service contract for a key part of their business process. I allowed a credit situation with them to grow over the course of 3 months while I allowed them to have 60 day terms. And then, they went out of business and left me holding the bag with $150,000 in unpaid AR after I spent $90,000 generating…
^ this is real talk. Big companies love to be behind on AP for a variety of reasons, among them: - Their own 'highly matrixed' organizational structure makes it near impossible to find 'the correct person' to talk to about accounting issues, let alone get a straight answer out of them - so chasing these issues down becomes a huge drag on your time and energy and you may very well just give up after a while - Past-due…
Some of these tricks are laid out in "Das Kapital". I found that book to be very educational.
Re: Ask HN: Why did your startup fail and what did you learn?
#13[deleted]
Re: Ask HN: Why did your startup fail and what did you learn?
#14I was an early engineer at a startup that failed for a somewhat unique reason with an important overarching learning. We built a software platform that intended to automate the job of market researchers. Those researchers we hoped to replace ended up finding the tool itself useful. Since the platform didn't replace the employees, our pricing model fell short. In the end, we found success by hiring our own market rese…
VCs run funds and need a decent return consulting biz generally does not fit the ticket for them. If you intend to run a consulting shop you def. do not want VC money. (Unless you can spin and market like Palantir than you can easily position a consulting outfit as high grow tech company)
Re: Ask HN: Why did your startup fail and what did you learn?
#15They thought I would be just another brazilian and join their corporate corruption scheme against a major hospital here in southern brazil.
The main guy, a PhD in Physics from a top university in europe (but a retard IRL), will be cleaning sewers until death comes.
True story.
edit: i was the founder and they were clients in a bootstrapping program involving a top 10 tech giant and a hospital
Re: Ask HN: Why did your startup fail and what did you learn?
#16Lack of leadership, we had a general idea of what we wanted but it was never defined. We wanted Shopify, years before they came along, 2001. But we never defined the product because no one took leadership of the product and business.
Bad programming, (me) had just finished college and thought I could lead a team of programmers because I had done an ok prototype that was actually working at a small scale. Given that specs were being defined on the fly then the programming was a mess. To scale it, we brought in programmers hoping it would help but they mostly sat around because we didn't know what we were building. Also, we got subpar programmers because they were cheap. One guy managed to BS his way into a paycheck for 5 months without ever programming a line of code. After he was fired, I found out that that was his specialty, getting hired and getting fired a few months later.
We could not meet deadlines, we could not meet self-defined deadlines so the investor's money stopped.
A lot of useless infighting due to egos, we could not figure out the business but we sure found ways to fight and argue.
I wish we would have been more willing to learn as opposed to being so arrogant by thinking we knew everything. I use it as a warning every time I think I know everything and it brings me back to reality. We lasted 2.5 years. We should have closed shop at 3 months.
Re: Ask HN: Why did your startup fail and what did you learn?
#17I chased and successfully won a huge customer for my small and fledgling startup. I chased and successfully won a sole service contract for a key part of their business process. I allowed a credit situation with them to grow over the course of 3 months while I allowed them to have 60 day terms. And then, they went out of business and left me holding the bag with $150,000 in unpaid AR after I spent $90,000 generating…
^ this is real talk. Big companies love to be behind on AP for a variety of reasons, among them: - Their own 'highly matrixed' organizational structure makes it near impossible to find 'the correct person' to talk to about accounting issues, let alone get a straight answer out of them - so chasing these issues down becomes a huge drag on your time and energy and you may very well just give up after a while - Past-due…
A lot of this is probably true, but it's really to your benefit to understand, as a businessperson, that this is generally how large clients expect to conduct business. You can fight it and even establish better payment terms, but it isn't always worth it. It's usually cheaper just to build a business that is resilient to late payments.
Over the last 15 years or so, a lot of my best customers have been super-late payers. You take the good with the bad.
Re: Ask HN: Why did your startup fail and what did you learn?
#18I've had two startups "fail" for unusually clear reasons:
Startup #1: too hard to believe it could be big. Widely loved consumer website we tried to fund with angel/VC money, and it was too implausible it could ever be a $1b+ company. We needed a non-VC strategy to fund that business but didn't realize that - ran out of gas.
Startup #2: found PMF, business-model fit, high-growth, and had an amazing team. Blown up by a nightmare original founder (I was part of re-founding an existing business) and poor corporate governance. The original founder blew up a Series A and re-cap after the team new team made the company actually work.
What I learned from both is how finicky startups are and why conventional wisdom exists. The more you try to re-invent things that aren't core to the business or fit a square peg into a round hole, the more chances to fail you create.
Don't try to get 1000 things right. Try to get 1 thing right and rely on the wisdom of others to get the other things "close enough" to right to attract talent, capital, time, and attention to the 1 thing you did get right.
Re: Ask HN: Why did your startup fail and what did you learn?
#19If your business's revenue is based on B2B service sales with an extensive client educational sales process with regular renewals and varying client contacts, assume you will need built-in re-education salesperson time costs of renewals factored into the price set for your services. Don't assume clients will recognize the purpose and value of your on going services and renew automatically without proof and convincing all over again. Otherwise, your client re-education sales overhead will kill your profit margins.
Re: Ask HN: Why did your startup fail and what did you learn?
#20If it's not working, kill it. Your time is worth too much to waste.