Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How startups should die

blog.42floors.com

Post reply on HN
Print view View original

21–30 of 72 posts

Re: How startups should die

#21

Post by kemiller »

rubidium wrote: post #14
brd wrote: post #7

Absolutely yes to "Pass the Hacker News test". Seneca's letter Epistle XI is one of my favorites and teaches this exact lesson. It closes with "Cherish some man of high character, and keep him ever before your eyes, living as if he were watching you, and ordering all your actions as if he beheld them." http://www.stoics.com/seneca_epistles_book_1.html#‘XI1 I've found it to be a great technique for making better decis…

There's also the deathbed technique. Imagine you're 91 years old, with a few members of your family around, and you're thinking back over your life. How would you wish you would have made the decision? Admittedly, this only worked really well for me after I sat with a grandparent at their deathbed.

I recently did sit with my 91-year-old grandfather on his deathbed, and I don't think much in his working life would have even made the list. I'm still working out how to apply that lesson.

Re: How startups should die

#22

Post by rmason »

rubidium wrote: post #14
brd wrote: post #7

Absolutely yes to "Pass the Hacker News test". Seneca's letter Epistle XI is one of my favorites and teaches this exact lesson. It closes with "Cherish some man of high character, and keep him ever before your eyes, living as if he were watching you, and ordering all your actions as if he beheld them." http://www.stoics.com/seneca_epistles_book_1.html#‘XI1 I've found it to be a great technique for making better decis…

There's also the deathbed technique. Imagine you're 91 years old, with a few members of your family around, and you're thinking back over your life. How would you wish you would have made the decision? Admittedly, this only worked really well for me after I sat with a grandparent at their deathbed.

My grandfather worked in real estate and owned a number of commercial buildings that he lost during the great depression. It took him sixteen years, but he paid every one of his creditors off with interest.

I always took it as an example of the right way to act. But I have relatives that thought he was a fool not to declare bankruptcy and move on. There will always be people on both sides of that question, but he continues to be my inspiration as an entrepreneur.

Re: How startups should die

#23

Post by kemiller »

TomGullen wrote: post #2

I liked this article thank you. My theory on dying startups is that if its not working its better to go out with a bang (eg a crazy pivot or a high risk high reward gamble) rather than a bleed out. FedEx was a good example of this, if I recall correctly the CEO took all the cash they had and went to Vegas with it. Usually wouldn't turn out well, but that time it did. If you need money, and have exhausted all your opt…

Yes, this. The worst possible outcome for a startup is a slow, drawn-out death. The second-worst outcome is treading water without clear success.

Re: How startups should die

#26

Post by Causalien »

jaf12duke wrote: post #15
mathattack wrote: post #10

Earlier quoted context omitted.

Part of the question here is also, "What did you promise (implicitly or explicitly) when you got those email addresses?" That's really where it becomes an ethics issue. Our data gets sold every day. Another question is, "Did everyone get paid?" He did the right thing and saw to it that everyone got made whole. If the business goes into bankruptcy and some creditors are not being made whole, it's much harder to not se…

OP here. I can't remember what the exact figure was--but it was in the 5 figures. Which for me felt like a potential life-saver. I don't think what I promised my users was actually that relevant. It would've been super easy to change our terms of service to include the ability to sell or rent user data. I could have written it in a way no one would have understand. Of course, no one would have ever seen the change an…

In this situation. Do you think your moral obligation to repay your debt outweight the moral obligation to your user's data?

Or compare this to the moral obligation to repay your investor vs that of the user's data.

Re: How startups should die

#27

Post by pixelmonkey »

I was once on the other end of this -- witnessing a startup that failed "the wrong way". The unethical way.

I decided to use a startup to raise some money for a non-profit. Their business model was to help fund events / organizations with their platforms, and take a fixed 2-3% commission on the funds raised. I raised $500 using the platform. But I never received the check for the $500.

I knew the founder personally. I e-mailed him and week after week he said, "the check is coming, there has been some sort of accounting error". 2 months passed, and no check. Then 3 months.

So, I e-mailed one of his investors, a mutual friend. He said, "Oh no, I think they are in a very bad place and may not have any money. I have stopped using the service." I e-mailed the founder again. He replied that my money was gone, but that he had committed himself to pay it back.

He was looking for work, though, so he wasn't sure when. Then, the platform's domain name quietly stopped responding to web requests, and the whole platform went offline.

I'm now in this weird position where I'm debating pursuing legal action. I'm still in touch with the founder. He keeps saying that he will pay soon, but doesn't.

The money actually came from over 20 people who had donated to the cause. They are unaware the money never made it to the non-profit. The check I was trying to receive was meant to just be a direct donation to this cause. The founder's mismanagement actually led to $20-$40 being "stolen" from about 20 people. In a way, I acted as a middleman, by encouraging people to donate via this platform. And now, I feel very responsible to get this money back. Do I pursue legal action? I've debated it.

So, here's another piece of advice about how startups should die: "if it's not your money, it's not your money". In other words, if your platform deals with money (e.g. accepts donations, facilitates payments) it is NOT OK to use money you owe your customers to fund operations. That is called theft, plain and simple!

Re: How startups should die

#28

Post by connerbryan »

pixelmonkey wrote: post #27

I was once on the other end of this -- witnessing a startup that failed "the wrong way". The unethical way. I decided to use a startup to raise some money for a non-profit. Their business model was to help fund events / organizations with their platforms, and take a fixed 2-3% commission on the funds raised. I raised $500 using the platform. But I never received the check for the $500. I knew the founder personally.…

Eeesh. Nothing is more uncomfortable than a friend who owes you money.

Re: How startups should die

#29

Post by larrys »

mbesto wrote: post #16

> I remember sitting down with Paul Graham as our startup was failing. I remember how unbelievable difficult it was to get myself to that meeting. The last thing in the world I wanted to do was to tell him my startup was failing. It took him 30 seconds to process the failure and then he moved on. He was so unbelievably supportive and so excited for whatever it was I was going to do next. And this, my friends, is the…

"is the fundamental difference between SV and the rest of the world. From my knowledge and experience, something like this simply does not happen outside of America."

To state the obvious first SV != America.

And outside of SV there really isn't the sense of "failure is quite ok no biggie".

If you are located in a typical place in america and you lose people's money (I'm not talking about startup shot in the dark funny money) you will be viewed as a failure and less likely to get money again.

If you open up a restaurant or a typical small business (with either your own money or friends and family or a bank loan) and you fail you are thought of as a failure. It's really that simple. Most people won't say "ok he learned something let's take another shot".

Key difference is SV (or with any pooled investment fund) is that they understand that what they are investing in is shot in the dark. And besides it's not their money it's primarily their investors money. OPM. And even if it's their money they are betting on many horses a small amount. Not the ranch.

Had PG been working as an engineer at HP at the time and had put a large sum of his personal money into a venture that failed (money that might be needed for his children's college fund) he might have not been so "unbelievably supportive and so excited for whatever it was I was going to do next."

Post reply on HN