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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?

#261

Post by cube00 »

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…

> They know full well that you, the small company, probably aren't willing to put up the massive time and dollar resources in order to sue them, the big company, for what is to them small potatoes.

If they are well known enough surely a well placed social media post is all that's needed to oil the wheels.

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

#262

Post by tempuser24 »

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…

When you say the CIA do you mean the Central Intelligence Agency ?

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

#263

Post by UzhasKakoi »

There is one and one only reason why companies go out of business: they run out of cash.

Many a situation may lead to this, but lack of cash is the reason. When Leaman Brothers when under, the company had half-a-trillion dollars in assets but it could not convert these assets fast enough into cash to continue its operations.

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

#264

Post by bruncun »

Bootstrapped a fitness app (Bruiserfit - https://bruiserfit.com/) with a friend based on my own measurable high-intensity physical training workouts. We built the first version not really knowing what we were doing, slapped AdWords on it, but users never came. We couldn't get past the activation phase - the initial product wasn't intuitive and compelling people to workout is challenging. Over the past couple years we've iterated on the user experience to an adequate state, but we still lack retention. It seems like the format is still confusing for beginners and that most people simply don't want to train themselves to do tough, fast bodyweight workouts.

On the technical side, we used Rails 5 and followed the Thoughtbot playbook. But neither of us were very experienced in native development, which prevented us from offering many of the bells and whistles that other market offerings provide. If I had to do it all over again I would probably give it a shot with React + Firebase.

Like others have said here, democratically running an equally shared company with friends sounds better on paper than it is. Different personal beliefs and approaches often lead to deadlock. Communication is essential to avoiding resentment. It gets easier with practice, but there was still too much to juggle for us and not enough time, know-how, and motivation.

We still casually hack at the project on the side. My cofounder and his wife swear having the project on his resume landed him his current and very comfy gig. I'm still waiting to see if anything beyond the experience itself comes out of it for me.

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

#265

Post by fybe »

eps wrote: post #258
fybe wrote: post #221

I was part of a start-up that still exists but it seems to be stagnating. i left due to the founders having almost nothing in common except for making money. The site is like squarespace but for local shops and businesses. The founders met on an airplane and thought they can make a business. So you had the business CEO with no technical background living in X country and the ruthless CTO with his team in Y country. I…

I think the OP aimed his question at founders of failed startups. There are fewer of them than of us poor shmucks that got burned by a failed startup as a collateral damage. So their accounts of failures are far more interesting.

That's fair, perspective from actual founders definitely is a more interesting point of view.

Didn't want to give an off-topic anecdote but thought from my experience seeing what can go wrong for founders of a start-up I would share my experience.

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

#266

Post by ethbro »

mmsimanga wrote: post #240
zopa wrote: post #232

Earlier quoted context omitted.

A contract is an agreement, not a piece of paper. If you all agreed that he would represent you, than he was bound to do so, no matter what got written down. That, at least, is the theory. There are of course many, many steps between a theoretical case and successful claim. And it's certainly easier to win a case if you have a written contract as evidence --- though 20 people's testimony is pretty strong evidence, to…

I get where your questions are coming from but the real problem was that we were first a family then business people. In my culture, there is a alot of respect accorded to the elderly. We brought up not to question people older than us. So much so I struggled at work to call people older than me by their first name. It is fraud. Some of the family members wanted us to get the others arrested but this isn't so easy wh…

> Some of the family members wanted us to get the others arrested but this isn't so easy when you are family. It literally ends up with you getting your cousin's dad arrested, the same cousin you grew up playing soccer with

I grew up in the Southeastern US. Here, getting your cousin's dad arrested is a Tuesday. ;)

In all seriousness, sorry you had to go through this, and glad you took away good lessons. On the other side of the coin, never feel guilty about getting what's owed to you.

You're the only one you can trust to have your interests at heart.

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

#267

Post by UzhasKakoi »

Once I turned around a startup from about to go under to s profitable one. We restructured every piece of the value chain, but not without resistance from the founder/owner. Every suggestion I made was met with “I tried it and it did not work.” In reality she did not try, she intended but backed off when the other party pushed back.

In essence we took control over cash by: 1. raising prices significantly 2. Introducing differentiated product and two tiered pricing 3. Switched product production from prepaid to 45 days AP. ..... N. Restructured relationship with distributors

All these actions produced huge negative working capital. Instead of financing operations at an insane % rate, which technically was killing the business the company paid off all the debts and was spewing cash.

Cash Is King

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

#268

Post by ethbro »

mmsimanga wrote: post #251
jhowell wrote: post #247

Earlier quoted context omitted.

> On a side note, this made me realise why there is so much conflict in some mineral rich areas in Africa. Honestly if we weren't peaceful people there could have been serious conflict. Care to elaborate?

It's my way of saying we were really mad! Mad enough to come to blows which nearly happened at our meetings or to sabotage the whole mining operation. Have a look at this story[1] about a community in diamond rich land in South Africa who are still bitterly divided to this day. [1] https://mg.co.za/article/2014-01-30-bitter-fight-for-diamond...

It turns out, there's a name for this (which I learned in a HN comment): resource curse.

One theory being that, essentially, legal controls and enforcement are expanded with economic activity. But a sudden surge in resources (e.g. discovery or exploitation) exceeds the existing system's ability to control corruption, and it's very hard to steer a cash-rich system back to good governance after this happens.

https://theconversation.com/citrus-fruits-scurvy-and-the-ori...

https://en.m.wikipedia.org/wiki/Resource_curse

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

#269

Post by BitterSweets »

Not my startup but worked for one until they pivoted. We had a photographer platform (https://picr.com) competing with Thumbtack (except our photographers were to be paid higher instead of a bid to the bottom.

Everything seemed right. We had the right market (Portland, OR), with a beautiful design and great customer experience. We managed to get roughly 100 photographers on board but the customers never came. After a year or so, Picr ended up pivoting to more of a photographer platform than a AirBnb/Thumbtack alternative. Most of the team was let go and only a few devs stayed.

Lesson learned: Building a two sided market is hard.

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

#270

Post by philprx »

denkmoon wrote: post #156

- Founder gave up, went bush for weeks at a time, and I (the "right hand man") had no experience managing staff let alone running a company without the founder. We wasted tonnes of money on staff that I couldn't adequately manage or train which resulted in huge technical debt on almost every feature. - I should have opened my mouth 6-12 months earlier and put my foot down regarding my own capabilities. Also, hiring g…

Suggestion: Have one on ones with each of them, regularly, and have them speak (it's not you speaking during this meeting) to explain what they're doing, they will tell you what problems they face.

Speak after them to answer within short timeframe, and most importantly follow up to help them, frequently and in the long term, with thei problem they expressed.

I hope it will work for you.

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