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

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

#131

Post by catherd »

subhobroto wrote: post #38
tptacek wrote: post #33

Earlier quoted context omitted.

I really don't think we even think about it that much. We have terms in our contract, and we send emails when payment is due, but it's not like we'd ever flip out if someone was late. You can try setting late payment penalties, but my experience has been that client procurement and legal people get those stripped off routinely. At Matasano, I remember one of our anchor customers taking something close to a year to pa…

> You can try setting late payment penalties, but my experience has been that client procurement and legal people get those stripped off routinely. That at best. others just "forget" about the late payment penalties in my experience. The sibling comment from @mrhappyunhappy is interesting but when I tried it, clients would rarely pay the premium.

Late payment penalties are nice, in my experience, because it gives you an extra drum to beat when you are chasing down payment. But they are never actually paid.

I just try to identify anyone who has an accounting (+20%) or purchasing (+50%) department and automatically add to my quoted fees. That premium, the imaginary late payment fee, and occasionally stopping work until the client gets caught up generally makes the situation manageable.

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

#132

Post by rishabhd »

For 2 startups -

For first one, got ditched by the other founders. Lesson learnt, make sure everything is in black.

For Second one - Support, you may have the best product ever and the best implementation team on this side of planet, but the customer support is paramount. We gained too many customers too quickly and our support was stretched thin, hiring new employees to train them on an exotic platform was not easy. Also learnt that product simplification is the key to product design and success. Also, a lot of other reasons, but these were the prime one.

It was well worth the time and would give it another shot someday.

Edit : added some more text

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

#134

Post by jackgolding »

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…

> What I learned is that a title doesn’t grant you any control

Is this just for anything other than CEO? Or are they always held to the board/investors.

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

#135

Post by tonyedgecombe »

notyourday wrote: post #53
MisterOctober wrote: post #9

Earlier quoted context omitted.

^ 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…

Turning off a customer and refusing to turn them back on until the wire hits the account solves all kinds of problems.

That's been my experience, just the threat of turning it off has a way of unblocking the system. I usually start with the users of the system who are often as frustrated with the system as we are.

Having said that I mostly don't offer credit terms anymore, my average order value is about £500 which means it isn't worth the time spent chasing late payments. In 99% of cases the customer will find a way of paying upfront.

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

#136

Post by haolez »

We wanted to create a routing app for bikes, which would take in consideration cliffs, dangerous streets and the likes.

With our internal team, we’ve managed to create a killer backend that would do all the hard routing stuff without issues. It was better than Google Maps in most cases!

Now, we just needed the app. We used all our money to pay a third party contractor to make the app, and they failed miserably. We never received a working prototype. We ran out of gas.

The backend still exists, in case anyone wants to give the app a shot. I might release the backend as open source. Ping me if this interests you.

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

#137

Post by newman8r »

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.

I'm curious if there's any examples of this ever happening. Some company keeps ignoring a contractor's requests for a couple of years and ends up owing ~$20 million on a thousand dollar debt.

But like you, I'm pretty skeptical. Probably wouldn't hold up in court.

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

#138

Post by blazespin »

haolez wrote: post #136

We wanted to create a routing app for bikes, which would take in consideration cliffs, dangerous streets and the likes. With our internal team, we’ve managed to create a killer backend that would do all the hard routing stuff without issues. It was better than Google Maps in most cases! Now, we just needed the app. We used all our money to pay a third party contractor to make the app, and they failed miserably. We ne…

Yeah, frontend work is routinely under estimated. You are not the first.

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

#139

Post by ummonk »

haolez wrote: post #136

We wanted to create a routing app for bikes, which would take in consideration cliffs, dangerous streets and the likes. With our internal team, we’ve managed to create a killer backend that would do all the hard routing stuff without issues. It was better than Google Maps in most cases! Now, we just needed the app. We used all our money to pay a third party contractor to make the app, and they failed miserably. We ne…

That sounds really impressive. Definitely interested in seeing what you've got (and an open source release would be cool)!
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