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I wasted $40k on a fantastic startup idea (2020)

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Re: I wasted $40k on a fantastic startup idea (2020)

#61

Post by bryanrasmussen »

elpakal wrote: post #46
ilamont wrote: post #26

Earlier quoted context omitted.

That's right. A lot of founders don't make it to #3 in your list, or they only get the "make something people want" part. It's not enough. Build something people want and will pay for . Not just say they want. Not just say they'll pay for. Make something that they see and will immediately take out their cash/cc/paypal/venmo and pay for on the spot .

I’m not sure I agree with you about your extra > and will pay for. People want Reddit, people want FB and Insta. Do they pay for those? I’m not saying those are good or realistic models to follow but I think the scale of your product needs to be taken into account with your statement. ie landing millions of users can forgive the lack of a business plan _at that scale_ whereas a SAAS platform targeting B2B customers s…

>landing millions of users can forgive the lack of a business plan _at that scale_

yeah, if your business plan lands millions of users you better have more than $40k ready to fund it. Since most people don't have that at hand it's actually a really problematic plan, because you've got to be able to secure the funding for it right when it starts to hit, if you don't you're done, if you do you might have to do it by giving up too much control, if you won't then you're done.

Re: I wasted $40k on a fantastic startup idea (2020)

#62

Post by ipaddr »

IMTDb wrote: post #20
nijave wrote: post #11

Earlier quoted context omitted.

Or drug companies

Yes, a good business model would have been to : - Invest (a lot of) capital to develop the product, make data more readable, refine the UX etc - Invest (a lot of) capital to market the service to doctors, offering it for free to them, with the angle of improving their patient outcome - Invest (a lot of) capital to market the service to patient, offering it for free to them, with the angle of letting them check what t…

"Invest (a lot of) capital to market the service to doctors, offering it for free to them, with the angle of improving their patient outcome"

At this point the strategy fails. Patient outcome is not the metrics to be focusing on with this group.

Re: I wasted $40k on a fantastic startup idea (2020)

#63

Post by bonestamp2 »

I loved reading the story, but it sounds like the founder targeted the wrong customer.

Individual doctors are not the customer. When the incentive for the customer doesn't outweigh the investment, that's when you need to scale up the customer.

The customer for this product is a business that deals with tens or hundreds of thousands of patients: health insurance companies, government healthcare purchasing departments (large market outside the USA), the sales department at the drug companies themselves, etc. These companies are all incentivized by getting better treatments for their patients because that either lowers their costs, or sells more of their drugs (when they're the best option).

Re: I wasted $40k on a fantastic startup idea (2020)

#64

Post by jrs235 »

hjorthjort wrote: post #49

My first thought was "you know who would want this? Insurance companies!" Doctor have a moral incentive -- often a strong one! -- to maximize your health, but they actually don't have the economic incentive to keep you healthy. Their incentives are similar to those of drug companies. But insurance companies want you to need as little care as possible. They are the ones who will sponsor your checkups, may encourage yo…

>But insurance companies want you to need as little care as possible.

Sadly this isn't true. Regulated insurance companies that must pay out a minimum percentage of premiums (in other words their profits are limited by cost plus pricing) don't care if prices stay down. They only care about stability and no surprises in a given year and are okay with prices continuing to go up and up and up.

*Amount of care and prices/costs are not exactly the same thing but they are highly correlated.

Re: I wasted $40k on a fantastic startup idea (2020)

#65

Post by abirch »

a1371 wrote: post #31

This was a fun read, but I think it came to the wrong conclusion. The real issue imo was "I had practically only weeks of runway". You just don't have time to make it happen. As a fellow start up founder, I see most of my job being just buying time for the business. Buying time to make, to talk, and to think. It wasn't like the tool had no value to Susan, maybe with a booth at her go-to annual expo, mentioning a few…

I agree with your comment about the wrong conclusion. Google didn't have a monetization plan, it launched in 1998 and didn't do adwords(ads) until 2000. It's always better to have positive cashflow, however, enough capital lets you have more runway. At the end of the day you do need someone who will pay.

Not that I dislike attorneys but they could have been a client. If you can show that a doctor didn't prescribe the best drug for their malpractice lawsuit it could bring in some money.

Re: I wasted $40k on a fantastic startup idea (2020)

#66

Post by jfengel »

Barrera wrote: post #15

The main reason this didn't work is that the founder didn't identify a customer willing to spend money . A lot of startups fail because they never identify a customer. Or even a problem. This one failed because before writing a line of code the founder did not take the next step and ensure that the prospective customer was willing to spend money on a solution. This is why so many failing startups try to pivot to two-…

That's the fundamental problem of any startup. How can you identify a customer without any product to show them?

You can define the existence of a market. You can know that there exists some customer with money and a problem you can solve. But that's not the same as being able to say, "Hey, wait a couple of years while I implement this thing. I don't suppose you'd be interested in paying up front?"

Every successful startup has that moment of bravery where they commit their own money and hope that the customer still exists, and is actually willing to cough up money rather than continuing to do whatever they had been doing while they waited. Every failed startup had the same moment, only the customer turned out not to be willing to spend the money.

There are obvious cases where they should have known that no customer existed. But there are also a lot of cases where they simply weren't in the right place at the right time. I think it's a nice myth that the business majors tell themselves that they would always have known beforehand, but it seems more like survivorship bias to me.

Re: I wasted $40k on a fantastic startup idea (2020)

#67

Post by runevault »

bckr wrote: post #17
itsmemattchung wrote: post #2

As a tiny little start up, dumping 40k on product development is (to me) a significant chunk of change. I do wonder if the author could've pulled in the MVP, tightened up the release cycles, before discovering that he was unable to "Make something people want".

He could have kept his day job and spent a few hundred dollars or less to have someone make some fake graphs. Hell, he could have made some fake graphs over a few weekends. Then he could have done exactly the same market research.

My one question there would be was he certain he could figure out the statistics to get to what he wanted? I feel like you need to get a rough idea of that much at least before you start pitching. Obviously you don't need every bell and whistle, all the data pipelines and so on. But basic proof would still be good to make sure you can deliver something vaguely in tune with what you're promising. But dropping all that money on contractors before you've done any REAL market research is wild to me.

Re: I wasted $40k on a fantastic startup idea (2020)

#69

Post by Simon_O_Rourke »

whimsicalism wrote: post #35
ilamont wrote: post #26

Earlier quoted context omitted.

That's right. A lot of founders don't make it to #3 in your list, or they only get the "make something people want" part. It's not enough. Build something people want and will pay for . Not just say they want. Not just say they'll pay for. Make something that they see and will immediately take out their cash/cc/paypal/venmo and pay for on the spot .

I've noticed this a lot - I think people are far too quick to take face-to-face positive feedback at, no pun intended, face value. To me, it seems like a pretty elementary mistake, but I think that oftentimes people are more subconsciously desiring external validation than accurate assessments.

This chimes a lot with what I've seen, and indeed, what I do myself. I had a few friends plough hard-earned money into a really bad start-up idea (basically an inferior pay-walled Wikipedia), and instead of telling them what I really thought of it, I weaselled out saying something bland, non-committal and mildly supportive.

Re: I wasted $40k on a fantastic startup idea (2020)

#70

Post by tedmcory77 »

Barrera wrote: post #15

The main reason this didn't work is that the founder didn't identify a customer willing to spend money . A lot of startups fail because they never identify a customer. Or even a problem. This one failed because before writing a line of code the founder did not take the next step and ensure that the prospective customer was willing to spend money on a solution. This is why so many failing startups try to pivot to two-…

Yes. The problem needs to be pervasive, painful, and willing to pay to fix it.
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