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Ask HN: Why did your startup fail and what did you learn?

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Re: Ask HN: Why did your startup fail and what did you learn?

#221

Post by fybe »

I was part of a start-up that still exists but it seems to be stagnating. i left due to the founders having almost nothing in common except for making money.

The site is like squarespace but for local shops and businesses. The founders met on an airplane and thought they can make a business. So you had the business CEO with no technical background living in X country and the ruthless CTO with his team in Y country.

I left ship when the CTO cleaned out the bank account and disappeared. The Y country never extradite their citizens or charges them for any international crimes so he got off scott free while the CEO had to "use" his car insurance to get money to keep the business afloat and pay the out-sourced developers. (He set his car on fire to get a payout)

Edit: I guess the lesson is that the founders need a vision and co-operation to make it work. These two basically had a common goal of making money of a fad. Back then the latest craze was to become a market place for other businesses ie. JustEat, SquareSpace etc.

Another would be that the core team better stick together. The founders were separated by hundreds of miles. The business side was in EU while the CTO and the devs where not. This caused communication issues, planning problems and of course money.

I left because of money too I guess. After working 6 months on a "paid" internship which was 50 eu a week I was offered a contract that would give me 0.5% equity, no raise and force me to work full time AND when doing my final year college thesis to be based for something the company can use.

Re: Ask HN: Why did your startup fail and what did you learn?

#222

Post by haolez »

scabarott wrote: post #157
haolez wrote: post #136

We wanted to create a routing app for bikes, which would take in consideration cliffs, dangerous streets and the likes. With our internal team, we’ve managed to create a killer backend that would do all the hard routing stuff without issues. It was better than Google Maps in most cases! Now, we just needed the app. We used all our money to pay a third party contractor to make the app, and they failed miserably. We ne…

I didn't quite understand this. Presumably, you're developers and just created a I assume fairly complex backend product (better than Google Maps). What stopped even just one of you from picking up a book on react-native/electron/whatever and knocking out a workable front-end? Did you exceed your runway, run out of time etc? edit: to clarify, I meant after the third-party didn't work out. Also not critiquing just gen…

I simplified the story a little bit, but two factors contributed to the sad outcome:

1. making a _live routing_ app is tougher than it looks

2. our team was really emotionally exhausted after this (the whole process consumed around 2 years) and some key team members needed some time off

But yeah, it could have been possible to make the app ourselves.

Re: Ask HN: Why did your startup fail and what did you learn?

#223

Post by tim333 »

the_clarence wrote: post #162
stretchwithme wrote: post #113

Well, it didn't completely fail yet. It's still going 13 years after I left, actually. But part of the struggles were brought on by my mistake with a military customer that probably cost us the contract. This was back at the beginning of the Iraq war. Our main contact told me the US should attack France, as they weren't supporting the invasion. I made the mistake of saying I was glad he was executing policy, not maki…

I mean. What could you have told that stupid guy

I find sarcastic positivity often is good eg. "that's a really great idea - you should be president." Let's you take the piss and often they think you're being serious.

Re: Ask HN: Why did your startup fail and what did you learn?

#224

Post by haolez »

ckastner wrote: post #153
haolez wrote: post #136

We wanted to create a routing app for bikes, which would take in consideration cliffs, dangerous streets and the likes. With our internal team, we’ve managed to create a killer backend that would do all the hard routing stuff without issues. It was better than Google Maps in most cases! Now, we just needed the app. We used all our money to pay a third party contractor to make the app, and they failed miserably. We ne…

> We used all our money to pay a third party contractor to make the app, and they failed miserably Where did you hire/find the third party contractor? Friends of mine, in two separate startups, got burnt badly by those outfits that offer the "native apps for iOS and Android" package for $10K or so. I talked to some of those "developers" once, when I helped my friend troubleshoot an issue. It was horrible . They were…

We found them in Google. They were from the same country as us. They were really bad. One of the versions of their _navigation_ app would not navigate - the GPS simply wouldn't track the user in the app's map. It was a really frustrating experience.

Re: Ask HN: Why did your startup fail and what did you learn?

#225

Post by TheOtherHobbes »

newman8r wrote: post #137
koolba wrote: post #95

Earlier quoted context omitted.

I’m pretty sure that violates most State usury laws. Note that I’m not referring to charging interest for late payment as being illegal. I’m specifically referring to charging 10% compounded weekly, which comes out about 14200% annualized.

I'm curious if there's any examples of this ever happening. Some company keeps ignoring a contractor's requests for a couple of years and ends up owing ~$20 million on a thousand dollar debt. But like you, I'm pretty skeptical. Probably wouldn't hold up in court.

The outcome would be entirely random - dependent on the inclination of the judges.

A sensible business would settle out of court with a very low offer. A sensible contractor would accept the offer.

But generally this is another example of corporate privilege.

In reality, late payments kill many small businesses. In a political system that was genuinely friendly to the small guy, fines for late payment would be mandatory.

Re: Ask HN: Why did your startup fail and what did you learn?

#226

Post by TheOtherHobbes »

phonebucket wrote: post #209
gfarah wrote: post #163

On my first startup right after university, we were doing an IoT device (hardware + software), our MVP was good enough to make a couple of sales amounting to 550 consumers. At that point the board decided the best way to grow was to bring in “adult supervision” aka a seasoned CEO to run the company. Even though I did all the software, I had only around an 8% stake in the company at the time. The person in question de…

"Lesson learned: Big-corp CEOs don’t make for good startup CEOs 99% of the time." While this may be true, I don't believe it is fair to reach this conclusion on the basis of a single experience.

I suspect a search would discover other supporting data.

Re: Ask HN: Why did your startup fail and what did you learn?

#227

Post by ficklepickle »

fybe wrote: post #221

I was part of a start-up that still exists but it seems to be stagnating. i left due to the founders having almost nothing in common except for making money. The site is like squarespace but for local shops and businesses. The founders met on an airplane and thought they can make a business. So you had the business CEO with no technical background living in X country and the ruthless CTO with his team in Y country. I…

Wow! Torching a car takes serious dedication. Maybe I shouldn't, but I think I respect that.

Re: Ask HN: Why did your startup fail and what did you learn?

#228

Post by mkagenius »

mmsimanga wrote: post #219

I come from a coal mining region. For over a 100 years there has only been one mine in the area, a big mine. There is plenty of coal in the surrounding areas. This is Africa. An uncle of mine had the idea that we start a mine. He invited about 20 of us, all related. We started putting aside money to register a company, pay a geologist to prospect for the coal and get mining permit to mine the coal. We all contributed…

> owing 5% I ownwed 0.00086% of the mine

Didn't you sign after reading? I dont know how it works there but generally one has to get all signatures for approval.

Re: Ask HN: Why did your startup fail and what did you learn?

#229

Post by bitexploder »

tptacek wrote: post #17
MisterOctober wrote: post #9

Earlier quoted context omitted.

^ this is real talk. Big companies love to be behind on AP for a variety of reasons, among them: - Their own 'highly matrixed' organizational structure makes it near impossible to find 'the correct person' to talk to about accounting issues, let alone get a straight answer out of them - so chasing these issues down becomes a huge drag on your time and energy and you may very well just give up after a while - Past-due…

A lot of this is probably true, but it's really to your benefit to understand, as a businessperson, that this is generally how large clients expect to conduct business. You can fight it and even establish better payment terms, but it isn't always worth it. It's usually cheaper just to build a business that is resilient to late payments. Over the last 15 years or so, a lot of my best customers have been super-late pay…

We service Fortune 50 customers in a similar business to what Matasano did. This side of the business is definitely harder than the hacking / technical work. It can be tough to deal with and structuring bigger deals is important. Fast payment is not only important to not being at risk, but a short cash conversion cycle is basically more capital available at lower revenue. Kind of like velocity in the Agile dev world, only for money. There are diminishing returns (edit: in attempting to lower CCC) and large customers will throw you into the meet grinder that is their AP.

Re: Ask HN: Why did your startup fail and what did you learn?

#230

Post by rwmj »

tptacek wrote: post #20

If it's not working, kill it. Your time is worth too much to waste.

This is the most important lesson, and one I wish I had learned at my last start up. It drifted along and eventually failed for a variety of uninteresting reasons. But really we should have killed it much earlier when it was obvious that it wasn't going anywhere. (Unfortunately at that time it also was making just enough money to keep things turning over)
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