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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

#171

Post by EGreg »

erikb wrote: post #124
EGreg wrote: post #29

People live lives. Companies create products. Sometimes what you build becomes bigger than you. If you want to quit, and everyone else wants to keep going why not let someone else run the show? If you started a chess club, or even a chatroom, and had no time (as the guy says, he only has one life) to be an admin, would you just close down the whole thing and kick everyone out? Maybe. If they really were so passionate…

Great question, imho. But indirectly it is also answered. It seemed like he spent the majority of the power into the project and the others would have joined when it was starting. It's like you have the chess club but other people only come if you are there and maybe even only if you have something special to offer.

Right but often they come for the chess. It's about the chess for them, so they don't want to have the club shut down on the whim of a single dude.

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

#172

Post by funkyy »

seibelj wrote: post #55
cft wrote: post #54

Earlier quoted context omitted.

When PayPal started, they were beaming money between PDAs. Then after a while when their curves were no good, they noticed that some confused users thought that their Confinity website that described how to beam money, was actually the place itself to transfer money to others. Then they pivoted. Then this new product was not viral. Then they started paying $10 when you open the account.

Please don't down vote this comment. He is making a salient point about why it might not be a good idea to quit at such an early stage. Whether it was the right decision for Contract Beast or not, he is trying to provide a counterpoint to the idea of giving up by providing an alternative anecdote. Some people in a similar situation could use the boost.

While your comment is right from my position (I often help startups to solve them problems) thanks for using "salient" - new really nice word goes right in to my dictionary.

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

#173

Post by moribondus »

ContractBeast would have accumulated lots of data that would be compelling for its users. The only problem is that you cannot hand out that data directly: How much did someone else pay for the same contract? What conditions did he get? If you find a way to effectively use this information without actually revealing it, you would have found the compelling feature that you were looking for. ContractBeast would have become the go-to place to check if your contract actually makes sense.

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

#174

Post by onion2k »

emcrazyone wrote: post #138
onion2k wrote: post #59

Earlier quoted context omitted.

If the situation were really "take the money and do 70+ hours a week for a year" versus "shut down the business" then I'd agree, but that's a false dichotomy. You can run a startup putting in far less time than that; putting in long hours is a choice. You can bring in a team or outsource the parts you don't like. It makes it harder to succee but it's an option. You could (depending on lots of caveats) simply hand the…

"outsource the parts you don't like" This doesn't work from my personal experience and others seem to agree. Myself been apart of a few startups learned you never outsource your core competency and doing so is usually suicide no matter how good you think you are at managing. It's easy to see when you realize your goals and your outsourcing entity have different objectives which are at odds with one another.

If your core competency is something you don't like doing then your business is probably going to fail regardless. Keeping that in-house should be obvious.

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

#175

Post by veritas213 »

"ContractBeast did not address the problem of providing a significant, consistent and immediate benefit"

Neither does insurance but its pretty much a no brainer for most companies. Contact management isnt suppose to give instant gratification. Its supposed to provide peace of mind knowing you will not miss important dates in the FUTURE.

Hate to say it but Mr Romero seems to have given up way too early. All the smart people on HN someone will pickup the baton and run with this idea.

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

#176

Post by spearo77 »

tptacek wrote: post #137
sparkzilla wrote: post #133

Earlier quoted context omitted.

Actually, that's my point. They were accepted and told that their product was no good straight away, thus forcing them to pivot. So why were they accepted with a poor product, when other applicants who had stronger ideas were turned away? A selection process that supposedly values the skills of the people over the combination of skills and product will lead to people like this guy not knowing why they were selected,…

You keep saying they were forced to pivot as if you might convince by sheer repetition. They made the choice. They surely didn't have to. For that matter, if they wanted to drop out, they could have. Your argument seems tendentious.

tendentious |tɛnˈdɛnʃəs|

adjective

expressing or intending to promote a particular cause or point of view, especially a controversial one: a tendentious reading of history.

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

#177

Post by tyingq »

Having some experience dealing with the "purchasing" side of the house at large companies, I can guess part of what might have gone wrong.

Contract Beast's customers were likely exclusively these "purchasing" people, and thus, that's where the feature requests and feedback were coming from.

But, in the end, the success of the product within a customer company is often more driven by the "non purchasing" users...the actual departments that are trying to buy (or sell) something. It's not unusual for the wants/needs of these people to be completely different than the purchasing department.

I watched several attempts for contract management software fail because of this. In the end, what won out was narrowing the solution down to the biggest pain point...implementing just e-signatures. That got rid of all the manual print / sign / scan-or-fax cycle, which everyone could agree on.

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

#178

Post by joe563323 »

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.…

Bravo. On a different note. Why is your username is displayed in green ?

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

#179

Post by _zl9i »

cft wrote: post #145
CPLX wrote: post #108

Earlier quoted context omitted.

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

Yeah, just like with Tesla...

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

#180

Post by erikb »

EGreg wrote: post #171
erikb wrote: post #124

Earlier quoted context omitted.

Great question, imho. But indirectly it is also answered. It seemed like he spent the majority of the power into the project and the others would have joined when it was starting. It's like you have the chess club but other people only come if you are there and maybe even only if you have something special to offer.

Right but often they come for the chess. It's about the chess for them, so they don't want to have the club shut down on the whim of a single dude.

Okay, you say A, then I say "not A but B", and then you continue the discussion by saying A again?
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