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Why I turned down $500K and shut down my startup

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Re: Why I turned down $500K and shut down my startup

#11

Post by santoshalper »

ztratar wrote: post #7

"It would have been different if we had been debating which plan among several to implement or how to shore up specific weaknesses, but we had nothing." I don't really understand "having nothing" -- you're either creating value or you're not. You guys spotted a real problem, but your v1 solution was meh. There were certainly multiple ways out (and not just tack on gamification), and even if some were long-shots, the…

I think he just doesn't agree that there were multiple ways out. He seems to believe that they exhausted options and couldn't figure out a path.

Re: Why I turned down $500K and shut down my startup

#12

Post by ChicagoDave »

After this, I'd never give this guy time or money and I doubt anyone else will either. No matter how shitty you feel about your start-up, if you have a willing team and cash, you should see it through. Being an entrepreneur isn't always about having all of the answers. It's very often about not knowing the answers and figuring things out. Especially if you have a team and cash flow and investors.

I think this guy needed to take a day off or seven and get his head back on straight. I'm nearly positive every entrepreneur goes through the "doubt" process many times in a given start-up.

It's the person that figures out how to renew themselves that ends up succeeding.

Re: Why I turned down $500K and shut down my startup

#14

Post by mdorazio »

arcticfox wrote: post #9

It's pretty surprising to me that there was no way to shift enough of the value gain from "huge gains in efficiency" forward to keep people motivated about the product. For example: use a chunk of the $500k as rewards to push people through the initial adoption. Then presumably the real gains would take over and they'd be happy customers.

Yes, but would that really be sustainable? Paying every single user to get them to actually use your product is generally a money-losing proposition in the long-term unless you plan to jack up your prices after you lock them in. It's also not at all clear if just offering rewards would be enough to get people to use the product in their daily contracts workflow. Switching from whatever system someone currently uses to a new one for contracts is a huge pain, so it would require a similarly huge up-front commitment. I've seen contract systems switchovers a few times at clients, and pretty much every single person in the trenches has hated it and only done it because it was forced on them from the exec team.

Re: Why I turned down $500K and shut down my startup

#15

Post by grizzles »

zer00eyz wrote: post #6

The underlying idea behind what he did here is sometimes called Ethnography. There was another great article a while back on this going on at adobe/photo shop: https://medium.com/startup-study-group/my-two-years-as-an-an... As far as tools go, ethnography can be very powerful in the right hands.

Great comment. Fantastic article.

I wonder if they considered involving both sides of the contract from the get go. When I've negotiated small-mid size deals with other tech savvy folks, I've often thought a two sided chat style interface that I could use sitting next to someone or if they were across town would be ideal.

The way I conceptualized it would be a 3rd party tool for making deals where the main feature is standardized clauses for minimal lawyer involvement. Eg. Need a standard confidentiality clause? (Drag Drop). Boom. Let's do business.

Commercial lawyers would hate it, but that's sort of the point.

Re: Why I turned down $500K and shut down my startup

#16

Post by kasey_junk »

ChicagoDave wrote: post #12

After this, I'd never give this guy time or money and I doubt anyone else will either. No matter how shitty you feel about your start-up, if you have a willing team and cash, you should see it through. Being an entrepreneur isn't always about having all of the answers. It's very often about not knowing the answers and figuring things out. Especially if you have a team and cash flow and investors. I think this guy nee…

> The rest of the team kept their day jobs.

> The team was excited. Our potential investors were excited.

He didn't really have a team and he didn't really have investors. He took a personal risk and found it wasn't working. He shut it down before it got expensive for people other than himself. I applaud this.

People, especially around here, need to understand failure is the norm. This person failed fast, well. Nice work. On to the next thing.

Re: Why I turned down $500K and shut down my startup

#17

Post by sparkzilla »

ChicagoDave wrote: post #12

After this, I'd never give this guy time or money and I doubt anyone else will either. No matter how shitty you feel about your start-up, if you have a willing team and cash, you should see it through. Being an entrepreneur isn't always about having all of the answers. It's very often about not knowing the answers and figuring things out. Especially if you have a team and cash flow and investors. I think this guy nee…

It's only a matter of time before this kind of thinking results in founder suicide. I've read multiple cases where investors, including Y Combinator, forced founders to pivot, which caused serious mental distress to the founders. If the idea won't work, drop it, and drop the founders too, until their next project can be properly assessed. Dropping a project doesn't mean the founders are bad founders or that they are great founders - it simply means that they realised the limitations of the project. Investors should keep the founders in mind for their next project, but giving them cash and forcing them to pivot is a sure way to disaster. Ideas need time to develop. Tim should be commended for realizing that his product would not work, and dropping it before it caused his team and the investors even more stress. I consider his post a sign of maturity and look forward to hearing about his next project.

Re: Why I turned down $500K and shut down my startup

#18

Post by swalsh »

ChicagoDave wrote: post #12

After this, I'd never give this guy time or money and I doubt anyone else will either. No matter how shitty you feel about your start-up, if you have a willing team and cash, you should see it through. Being an entrepreneur isn't always about having all of the answers. It's very often about not knowing the answers and figuring things out. Especially if you have a team and cash flow and investors. I think this guy nee…

Opposite to me, finding a group of guys willing to take your money, and work their brains out until it runs out isn't hard to find. Finding a guy who will take that money only if he thinks he can do something productive with it, is much more valuable. I know I can feel pretty confident that if he's taking my money, he's optimistic it'll turn into something. I gotta say, I respect his move.

Re: Why I turned down $500K and shut down my startup

#19

Post by pookeh »

Often times, the products we make should really be features of a larger offering. Did you guys explore building on top of your contract tech or getting acquired by a company that requires your tech? for example: 1. Marketplace of services that need contract signing between parties. 2. Project management app for SMBs or freelancers 3. Legal document authoring app that extends to contract signing.

There are prolly more ...

Re: Why I turned down $500K and shut down my startup

#20

Post by encoderer »

I have to say, I don't agree with this part at all:

"But most of the time, customers don’t really want the the features they are asking for. At least not very badly."

Customer feedback drives an absurd amount of our roadmap at Cronitor. We have a good idea of the many shortcomings of our product and are constrained primarily by resources in developing it faster. When a customer -- especially somebody on a trial -- puts their thumb on the scale of a specific flaw or deficiency, we look at it as an opportunity to seriously delight that user and at the same time level-up the product for all users after. We don't build everything asked for, but I would say "most of the time, customers know exactly what they need, and we try to give it to them within our ability."

A specific example for us would be Etsy, who uses Cronitor on a part of their business and during evaluation asked for a couple API endpoints to expose more advanced functionality.

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