Why I turned down $500K and shut down my startup • Hacker News Board

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

#141

Post by firasd » Thu, Jun 09, 2016, 4:01 PM UTC

a-saleh wrote: post #63

timoth3y wrote: post #49

Hi. Tim here. I'm delighted that this article struck such a chord. I'll try to answer the most common questions here. I wish I could answer everyone directly. 1) I called it off before anyone sent money or quit their jobs. The only one who lost money or a job because of ContractBeast was me. If the money was in the bank and the team on board we would have gone ahead. That's why I had to make that decision when I did.…

You mention that you might write an article on distinguishing the tangential feature requests from the useful ones. I would really like to read that :) Especially if I could send it to our product managers, because our product has been in a cycle "we need an enterprise sale" > "potential customer mentions a feature they would have liked" > "we scramble for a month to write the feature and close the deal". To be hones…

Set Your Priorities: http://www.joelonsoftware.com/articles/SetYourPriorities.htm...

A couple recent related articles:

1) How to Pick Winning Product Features https://medium.com/pm-insights/how-to-pick-winning-product-f...

2) Building Products https://medium.com/the-year-of-the-looking-glass/building-pr...

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

#142

Post by 50CNT » Thu, Jun 09, 2016, 4:16 PM UTC

sokoloff wrote: post #125

50CNT wrote: post #105

Earlier quoted context omitted.

What about bootstrapped startups? They have to be in the black very quickly, if not from day 1. Do they count as startups? Really, we've got four different terms we're trying to delineate. "Exponential growth business" vs. "Incremental growth business". and "Unstable business with total expenses exceeding profits" vs. "Stable business with total expenses below profits" All 4 permutations are valid. I personally like…

Small nit: you mean to use "income" or "revenue" where you use "profits" above.

yeah, got a little confused there.

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

#143

Post by davidgerard » Thu, Jun 09, 2016, 4:42 PM UTC

StavrosK wrote: post #102

timoth3y wrote: post #70

Earlier quoted context omitted.

That's a bad place to be stuck in. I'll see if I can put something together that makes sense and is fairly comprehensive. At the moment, a lot of it is "I know it when I see it" but that's not exactly helpful.

Isn't a big part of it the client saying that "it would be nice if..." versus "we can't use this unless"?

Much as a salesman can tell when a customer is saying "I would most certainly give you money if you turned your product upside down and painted it blue", which is correctly translated as "I will never buy your present offering."

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

#144

Post by corry » Thu, Jun 09, 2016, 5:13 PM UTC

sparkzilla wrote: post #136

corry wrote: post #119

Earlier quoted context omitted.

Really hard to read the article and conclude that "YC forced them to pivot". Sounds like things weren't working and YC was honest with them. From the same article: > We went back to PG, and he told us to stop worrying about Demo Day. With the right idea, we’d be working on the company for the next five-plus years. It was foolish to sacrifice the quality of the company to optimize for the next five weeks." Seems like…

The key point is "With the right idea" They were told their original idea wouldn't work, and they were put in a highly stressful situation of having to come up with a new idea under a short deadline, with high expectations. It doesn't matter if PG was nice about it, there was an enormous amount of pressure put on them to do something to be worthy of their position, pushed along with the implied message that that's wh…

Agreed that there's a ton of pressure and that can lead to unhappiness, stress, or worse. Doing startups isn't for everyone. Doing YC isn't for everyone. Doing YC with an idea that isn't working must be extremely unpleasant.

But pressure is the nature of startups whether you're in YC or not. And while YC knows a lot about good, bad, ugly startups and how to potentially fix things, it's fundamentally the founders' company and they have to make the decisions and execute. I don't think that's "founder worship" - it's just reality. Default state of the company is "dead". Good ideas and good execution are the only things that change that. It's not YC's company. They're there to help.

Anyways, we likely agree that the mental health downside of doing startups is poorly understood or appreciated so maybe let's leave it at that.

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

#145

Post by cft » Thu, Jun 09, 2016, 5:36 PM UTC

CPLX wrote: post #108

LionessLover wrote: post #97

Earlier quoted context omitted.

The "salient point" as you put it suffers from a huge acute case of selection bias and survivorship bias, two deadly diseases that kill the argument immediately after it's born.

Indeed. Not to mention the Internet was basically a wide open green field to build companies on in those days. There is no shortage of B2B focused web-based software in 2016.

I agree with the huge difference between 1998 and 2016 decisions. Soon it will be like starting a car company in 1930s: was possible in 1905, became impossible in 1930

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

#146

Post by spupy » Thu, Jun 09, 2016, 5:45 PM UTC

"I’ve started four companies in the past with a mixture of exits and bankruptcies, so I understand that this is what startups are supposed to do, [...]."

As someone completely unfamiliar with the world of startups, this sentence baffles me. If this describes your track record, how do you even get funding? Obviously I'm not an investor, but this sentence alone is a massive red flag.

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

#147

Post by collyw » Thu, Jun 09, 2016, 5:52 PM UTC

tedmiston wrote: post #116

mediascreen wrote: post #93

Earlier quoted context omitted.

I would still say that, to most people, a startup implies more than just a newly started business. I have never seen or heard someone who has just started a small brick and mortar business (without grandiose expansion plans) refer to it as a startup. That said, I'm not a native english speaker and I don't live in US - maybe it's more common than I think.

You're correct. We'd just call them small businesses. Though I have seen some small businesses working in technology refer to themselves as startups without really understanding the definition (or because they're trying to sound "sexy" to recruit developers).

You are too old. Its youngster hipster speak for running your own small business these days. I have heard a few friends referring to their business as a startups.

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

#148

Post by bshanks » Thu, Jun 09, 2016, 6:04 PM UTC

spupy wrote: post #146

"I’ve started four companies in the past with a mixture of exits and bankruptcies, so I understand that this is what startups are supposed to do, [...]." As someone completely unfamiliar with the world of startups, this sentence baffles me. If this describes your track record, how do you even get funding? Obviously I'm not an investor, but this sentence alone is a massive red flag.

Merely knowing that something often or even usually fails is not enough information to conclude that it's a bad bet -- in order to compute that, you also need to know how much money it makes when it succeeds.

For example, if you expect something to fail 80% of the time but to gain >400% the other 20% of the time, then the bet has positive expected value.

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

#149

Post by allemagne » Thu, Jun 09, 2016, 6:07 PM UTC

taytus wrote: post #95

timoth3y wrote: post #49

Hi. Tim here. I'm delighted that this article struck such a chord. I'll try to answer the most common questions here. I wish I could answer everyone directly. 1) I called it off before anyone sent money or quit their jobs. The only one who lost money or a job because of ContractBeast was me. If the money was in the bank and the team on board we would have gone ahead. That's why I had to make that decision when I did.…

I don't know man, $500k is a LOT of money to even pivot to the next Uber for X. I might be totally wrong, but I think you are just burned out. Best of luck!

Personally, I think more healthy skepticism like this is needed in startups. Everyone being completely convinced they can pivot to the next Uber for X is what scares me that there's a bubble and makes satires like HBO's Silicon Valley so poignant.

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

#150

Post by daveheq » Thu, Jun 09, 2016, 6:12 PM UTC

capkutay wrote: post #38

"I was deciding whether this venture was worth committing to another year of 70+ hour weeks. I need a higher level of certainty than investors do because my time is more valuable to me than their money is to them. Investors place bets in a portfolio of companies, but I only have one life." That's the key quote in the article. It's a fair decision from his standpoint but I wonder if saying that will lead investors to…

If an investor needs 70+ hours a week of work from one person to consider them determined, I'd question their intelligence, commitment, or financial security, because hiring some help seems like the wiser decision.