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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

#21

Post by danielvaughn »

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.

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

#22

Post by 999900000999 »

Looks like they blew most of the money on contractors.

Most college students or just technical friends could of built a prototype for next to nothing. Then you validate the idea.

They skipped to blowing as much as possible, I'm also a bit skeptical of the business model. Did they want to host the classes , etc ?.

Edit: "Building a website, Android app, and iOS app before proving product market fit was like burning money. It took us over a year to get to market, sell something, and get real feedback."

Why. Why would you not just start with a website. Not everything needs to be an app.

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

#23

Post by xrd »

So true.

Is it me, or was the biggest mistake simply not asking people to pay for something you can do manually in the beginning? I know creating a marketplace is the fantasy where the flywheel starts and you just collect checks. Until you see people shelling out real cash in real volumes (which you can take manually without anything more than a Stripe account) AND you have a deep understanding of the intricacies of that transaction, isn't it time to hold off building your marketplace?

So many of the comments noted in the article boil down to "launch quickly." If you follow that mantra, you cannot spend a ton of money on marketing, developers, or swag. You just have to ask people for money.

But, asking people for money and hearing no is an ego blow that no one wanting to build a marketplace can handle. Kudos to this person for writing up what they went through, that brutal honesty is powerful and real.

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

#24

Post by ly3xqhl8g9 »

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…

Those 126K spent on "App development". Plenty of money in CRUD APIs apparently.

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

#25

Post by inawarminister »

newbie578 wrote: post #17
thegreenswede wrote: post #6

You mention to not build the website, iOS app, and Android app all at once before getting market fit. Which of the three would you start with to quickly iterate and get feedback? When you mention that you had to often walk into like a scuba shop to try to get a sign on, were people more receptive if you 'had an app for that' already?

Do Flutter and cover all 3. Okay Flutter Web is pretty bad, but if you are cash strapped and need to move fast, Flutter is the way to go. I expect more and more startups to embrace Flutter, it is easily currently the best solution on the market (for 99% of app ideas). Yes native will always be better, but if you are a startup, your focus should be building an MVP and getting to product-market-fit as fast as possible…

Curious, why not React Native? I never heard anything bad about it in Android and iOS (except maybe the resource usage) and at least Microsoft is putting RN as first-tier framework in Windows nowadays.

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

#26

Post by matrix »

Not mentioned in the article: the market which this person was trying to enter is saturated with competition. These tour operators are bombarded with pitches for these things every day, and of course every one of them wants a cut of their hard earned revenue. It's a bad deal for a small business owner. They take all the risk, invest all the capital, while some SV firm comes along and kindly offers to scoop all the cream (margin) off the top.

So, this business failed due to a combination of lack of knowledge of the market and were not addressing a truly burning need for customers.

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

#27

Post by twelve40 »

andsoitis wrote: post #10

The first heading reads “marketplace for last-minute tours and activities”, followed by a paragraph that says “industry where 80% of bookings were still done using pen and paper, months ahead of time” How is something done both “months ahead of time” and “last-minute”?

i guess something like Airbnb Experiences?

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

#28

Post by TuringNYC »

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 many non-technical co-founders fall into this trap.

When you need updates or Phase II, now the rates go up massively. No one else can change it and the outsourced dev agency now has a monopoly. Usually the non-technical CEO/founder will now have to find a new agency, who might pull the same trick or some variation of it. It can be subtle:

- You have no code

- You have code, but it wont compile

- You have code, it will compile, but not into the version you're declared success with

- You have code to the client/app, but not to the backend

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

#29

Post by ipaddr »

thegreenswede wrote: post #6

You mention to not build the website, iOS app, and Android app all at once before getting market fit. Which of the three would you start with to quickly iterate and get feedback? When you mention that you had to often walk into like a scuba shop to try to get a sign on, were people more receptive if you 'had an app for that' already?

Start where your customers are

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

#30

Post by jamil7 »

thegreenswede wrote: post #6

You mention to not build the website, iOS app, and Android app all at once before getting market fit. Which of the three would you start with to quickly iterate and get feedback? When you mention that you had to often walk into like a scuba shop to try to get a sign on, were people more receptive if you 'had an app for that' already?

I'm not sure if there's an easy answer. It depends on the business and where your users already are. Sometimes that means mobile, sometimes that means the web, or sometimes it might be some plugin or extension to an existing tool.
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