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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?

#191

Post by Fiahil »

MisterOctober wrote: post #9
god_bless_texas wrote: post #4

I 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…

My previous employer was asking money upfront, the late payment problem was still here and kicked down the road until renewal, but at least the first year was payed in advance which allowed to bootstrap the business.

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

#192

Post by catwell »

gfarah wrote: post #163

On my first startup right after university, we were doing an IoT device (hardware + software), our MVP was good enough to make a couple of sales amounting to 550 consumers. At that point the board decided the best way to grow was to bring in “adult supervision” aka a seasoned CEO to run the company. Even though I did all the software, I had only around an 8% stake in the company at the time. The person in question de…

Also probably don't give up a controlling share of equity too soon?

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

#193

Post by lbriner »

It's hard to tell the exceptions from the rules.

Many people would say, e.g. don't deal with large companies because they will drag you along, eat your revenue and then not commit to a sale 12 months later. You will also find plenty of companies who will say that 1 big customer was their route to some early cash and success.

The bottom line with any business success is the CEO/executive team understanding how to take a high level view of the company and fix anything that isn't working!

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

#194

Post by ak39 »

karlkatzke wrote: post #112
Aeolun wrote: post #109

Earlier quoted context omitted.

They didn’t need any support of the product at all after buying it outright? I can see how you’d be temporarily without money, but not sure how they’d take away all income.

They took development in house. It’s not like PHP (despite some obfuscators being available) can’t be edited by anyone who barely knows the language.

Did you have subscription plan or was it only pay for development?

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

#195

Post by pandapower2 »

konschubert wrote: post #168
t0mbstone wrote: post #90

Our startup failed because my business partner wanted to just be the "idea guy" who designed the screens, while having me code it and do all the heavy work. Initially, this was going to be a 50/50 split, but after working on it almost full time for about 6 months, I ran out of money. He had a pretty big savings account and came from a well-off family, so he agreed to front me basically just enough to cover my rent wh…

Isn't there a middle way between a handshake deal and 10K on lawyers, meaning that you write down the terms in paper in a wording that sounds right to you and then sign off on it?

A simple email between the two of you describing the terms would be a vast improvement on a handshake deal.

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

#197

Post by tonyoconnell »

ttty wrote: post #176
tonyoconnell wrote: post #127

10 years ago I built an almost amazing business that schools, universities, teachers and students could use to build elearning and web apps. Think Square Space + Moodle + Udemy. Heres a demo if you're interested https://vimeo.com/2221065 The demo doesn't show much of the learning management features but they were also complete. But the app had memory leaks and I didn't have the cash to pay expensive engineers to fix…

So what happened to the app, you sold it to somebody or just let it die?

I spent hours and hours, months and months, up all night trying to fix memory problems, that I wasn't qualified to fix. It was one of the darkest times in my life. Everyone I loved wouldn't speak to me because I wouldn't give up. Then one night when I couldn't take the loneliness anymore I deleted the server, local copies and backups and went to bed.

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

#199

Post by fauigerzigerk »

gfarah wrote: post #163

On my first startup right after university, we were doing an IoT device (hardware + software), our MVP was good enough to make a couple of sales amounting to 550 consumers. At that point the board decided the best way to grow was to bring in “adult supervision” aka a seasoned CEO to run the company. Even though I did all the software, I had only around an 8% stake in the company at the time. The person in question de…

I trust that the product wasn't a health and safety critical device where having too few tests could have resulted in charges of criminal negligence.

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

#200

Post by dragandj »

thanatos_dem wrote: post #92
shawn wrote: post #82

Earlier quoted context omitted.

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 diffic…

Shouldn't that be a common knowledge in the area and work out as their competitive disadvantage? Provided that there are at least some competitors that are better for the customer?
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