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I lost $209k of my own money trying to start a business

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Re: I lost $209k of my own money trying to start a business

#181

Post by barelyauser »

dceddia wrote: post #41

The “industry where 80% of bookings were still done using pen and paper” seemed like a red flag to me. To my eyes that means they don’t need/want/buy tech solutions to this problem and it’ll be a huge uphill battle to convince them.

Huge red flag for me too. Lets compare to the barcode technology. One would argue the same thing about manufacturing. "Industry where X% of Y is still done using pen and paper". In manufacturing using pen and paper means real losses when you lose items. The manufacturer problem IS losing items because of pen and paper, and they have no viable option.

In their case, people use pen and paper because it doesn't really matter. All the value is getting the people.

Re: I lost $209k of my own money trying to start a business

#182

Post by jrochkind1 »

turdprincess wrote: post #162
jrochkind1 wrote: post #67

Earlier quoted context omitted.

So, if it's very hard to start a software company based on paying contractors for software development -- which seems true to me -- there's another warning here for software contractors/consultants . If someone is paying you, as contracting engineering talent for hire on a consulting/hourly/iteration basis, to develop an app or product they hope will be the foundation of a new business -- chances are high this won't…

What is the better kind of client / project then, out of curiosity?

So I'm no expert, I only worked in this area briefly and not as the business owner. And don't work in consulting anymore because I didn't appreciate the kind of work it was, so I'm biased. And I didn't say it was a "bad" kind of client/project, I said it was dangerous.

But other kinds of clients include:

* An existing successful business which needs more development or a new project

* An enterprise which needs things for internal use

* Universities, or non-profits

* Government contracting

If you are going to be developing for a software startup, being aware of the risk may help you manage it. Do _you_ think they have a possibly successful business, does it make sense to you? Of course, maybe you can't judge that, it's not like you're in the business of judging startup potential and it's not like that's easy. But does the founder seem to know what they are doing? Again, you may not be able to judge, but if you get a bad feeling it may not be worth it -- or if you get a bad feeling while in the middle, you may want to find a way to fire your client. (Even though it's hard to give up the money).

Will they be the kind of client that wants to tell you exactly what to implement and have you do exactly what they say? Or will it be a partnership where they identify requirements but trust you to work out some details? Either can be risky, but it turns out "we implemented exactly what you told us to implement" isn't always enough to stop them from blaming you for their failure, and I think in some cases can paradoxically make it worse.

Re: I lost $209k of my own money trying to start a business

#183

Post by e40 »

TuringNYC wrote: post #28
blagie wrote: post #9

I have a very high level of scepticism towards non-technical founders without deep pockets: 1. There's an agility to being able to change things yourself, at 2am if necessary. That's very important to startups. 2. There's a discipline to not accruing unreasonable technical debt of the type that will sink you two years in that you can't expect from someone who doesn't deeply care. 3. Managing devs generally requires u…

+10 on point 3. Even as a highly technical CTO, it is shocking what outsourced dev agencies will try to do. I've seen dev agencies try to conclude engagements with a "successfully working app" but havent delivered any source code, or when source code is delivered it cannot actually be compiled into the successfully working app. As a technical CTO I can smell this a mile away and work it into SoWs, but I wonder how ma…

> I've seen dev agencies try to conclude engagements with a "successfully working app" but havent delivered any source code, or when source code is delivered it cannot actually be compiled into the successfully working app.

The recliner I bought 2 years ago has an iOS app that basically works, but has many flaws. It's clear the company does not have the source code. The developer, in the app store, has a name with Chinese characters and the company is based in the US. It was right after the pandemic, that I bought it, and complained to their support. I was still in the window of returning it for a full refund, so they told me "we'll get right on that" and fix the problem I reports. Almost 2 years later and not a single update to the app.

EDIT: company is Human Touch, chair is the Gravis ZG.

EDIT2: sorry, it was the Copyright message that was in Chinese. https://apps.apple.com/us/app/gravis-chair/id1435036207

Last update Apr 2020.

Re: I lost $209k of my own money trying to start a business

#185

Post by TrackerFF »

danielvaughn wrote: post #21
bluedino wrote: post #14

> I'll never depend on a 3rd party dev as the main means of production again. He spent over half of his money on it as well. I've had more than one person come to me with their business idea, and they have a terrible website (or app) that they have spent 100, 200, or even 300k on. And it doesn't even work. If you aren't staring out WITH customers, you either have to code it your damn self, or have a technical co-foun…

Seriously, sign me up for that contract. Give me 100k-300k for a single website? That website is gonna be a thing of beauty.

Well if you want some numbers - I was on the board of some real-estate business with around 350 units. They had this ancient website with a basic web form for potential tenants. Just a simple application where you entered your name and information, what type of apartment you'd like, and that would get sent to the operations manager as a PDF file. It was probably made in the early 00s.

The owners wanted something similar, but new looking - so really no added new functionality. Just a design do over, along with better hosting (the webpage was being hosted on the local server of the original designer, some retired dude in his 70s. If you wanted any changes, you'd have to call him and he'd apply changes to the HTML files).

Our cheapest option was a local student who'd charge us $3k for the job. But the owners wanted "24/7 support", so that went out the window.

Next in line, a local design shop quoted us around $7k. Still, no VIP support or whatever. And we'd still have to deal with hosting ourselves.

I had gotten a bunch of other quotes in the same ballpark, but the owner apparently knew a guy in one of the larger IT consulting firms, and they'd offer to do the job for a cool $20k (or around that ballpark), which came with 24/7 support and hosting for a around $2k / year. So they went for that.

Remember, this was just a simple landing page with a typical signup form, and a "modern design". Nothing more, nothing less. Total visitors a year? Probably under 1000.

I can only imagine the prices if they'd want some web app with user registration, login, tools, and what not. I can easily see some consulting firm charging hundreds of thousands for that kind of stuff.

Re: I lost $209k of my own money trying to start a business

#186

Post by thefounder »

e40 wrote: post #183
TuringNYC wrote: post #28

Earlier quoted context omitted.

+10 on point 3. Even as a highly technical CTO, it is shocking what outsourced dev agencies will try to do. I've seen dev agencies try to conclude engagements with a "successfully working app" but havent delivered any source code, or when source code is delivered it cannot actually be compiled into the successfully working app. As a technical CTO I can smell this a mile away and work it into SoWs, but I wonder how ma…

> I've seen dev agencies try to conclude engagements with a "successfully working app" but havent delivered any source code, or when source code is delivered it cannot actually be compiled into the successfully working app. The recliner I bought 2 years ago has an iOS app that basically works, but has many flaws. It's clear the company does not have the source code. The developer, in the app store, has a name with Ch…

I had one of their recliners. The leather got pretty bad. Now I have the Altwork station though I no longer work 27/7.

Re: I lost $209k of my own money trying to start a business

#187

Post by kevstev »

sbilstein wrote: post #105
jrochkind1 wrote: post #67

Earlier quoted context omitted.

So, if it's very hard to start a software company based on paying contractors for software development -- which seems true to me -- there's another warning here for software contractors/consultants . If someone is paying you, as contracting engineering talent for hire on a consulting/hourly/iteration basis, to develop an app or product they hope will be the foundation of a new business -- chances are high this won't…

Oh absolutely. Twice I made the mistake of coming onto a startup to fix the “mess” the previous dev shop had made. Both times the founders had developed an incredibly negative relationship with their dev shop. Hell, the company with the Series A was withholding payments, the preseed company at least paid their bills. I naively thought “of course they hate working with a dev shop, the incentives are wrong. I’m FTE wit…

> If they are coming from tech, the fact that they couldn’t convince a former colleague to work with them means they’ll be a terrible manager.

I kind of disagree here. I have been a manager at F*NG and just below those places in terms of pay, and getting my guys to jump to a startup without market fit, for the pay that those types of places tend to offer, I don't see how they would make the jump. The product/idea would have to be VERY enticing for this to happen, while for me personally, a CTO title would be enticing enough to maybe roll the dice on something.

Re: I lost $209k of my own money trying to start a business

#188

Post by giantg2 »

barelyauser wrote: post #171
giantg2 wrote: post #112

I mean, rich people get grants and loans (in the business name) for starting businesses because they don't want to lose their own money. That's how they stay rich.

Right, because bankers will definitely write off a loan for a business with no assets.

Yes, they're called no collateral loans. They're typically smaller and rely heavily on a detailed business plan with expert industry analysis.

Re: I lost $209k of my own money trying to start a business

#190

Post by gverrilla »

In a lot of cases, you don't need to be an expert coder at all, but having a basic understanding of programming and web will get you a long way. I had a Magento e-commerce built by a 3rd party in the past without a technical co-founder, but I would review each and every piece of code, and get errors A LOT OF TIMES (even though these were supposed to be professionals). It also made it much easier to understand the system, request features, etc. All I did to achieve this level of knowledge was a few online courses on: basic programming logic, basic php, basic css, basic html, and basic javascript. Takes a week, at most. Every founder involved with tech should have this basic understanding, and I feel many don't only because they think it's too hard, which is untrue.
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