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How startups should die

blog.42floors.com

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Re: How startups should die

#31

Post by smtddr »

connerbryan wrote: post #28
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.

A rule my father taught me when I was young.

"Never loan money to a friend with the expectation that you'll get it back, be ready to just let it go."

Re: How startups should die

#32

Post by YokoZar »

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…

If the business is sure to fail and you have money left but no clear idea what to do with it, wouldn't simply liquidating and giving partial returns on investment be a reasonable option?

Re: How startups should die

#33

Post by hnriot »

smtddr wrote: post #31
connerbryan wrote: post #28

Earlier quoted context omitted.

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

A rule my father taught me when I was young. "Never loan money to a friend with the expectation that you'll get it back, be ready to just let it go."

that's not very good advice. that's called being a chump.

Re: How startups should die

#34

Post by fludlight »

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.…

> That is called theft, plain and simple!

Not theft, but fraud. Unfortunately, it happens in many startups that don't have a qualified finance/business guy in a senior role.

Re: How startups should die

#35

Post by hnriot »

larrys wrote: post #29
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 fun…

I think the point that was missed here was that the idea wasn't the investment, investors invest in people. If one idea fails, the person is still capable of other ideas. If the failure was due to poor judgement, then the investor too, made a poor judgement, but there are many reasons why a startup, be it a tech startup or a restaurant might fail that are no "fault" of the management. Also investors are diversified, so while the startup failed, the portfolio as a whole might have still been up, so yet another reason why pg wouldn't get too upset.

Re: How startups should die

#36

Post by [deleted] »

hnriot wrote: post #33
smtddr wrote: post #31

Earlier quoted context omitted.

A rule my father taught me when I was young. "Never loan money to a friend with the expectation that you'll get it back, be ready to just let it go."

that's not very good advice. that's called being a chump.

[deleted]

Re: How startups should die

#37

Post by fludlight »

larrys wrote: post #29
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 fun…

> 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)

This is why you never invest more than you are willing to lose. If you do, and the venture fails, the blame for your reduced quality of life rest not on the failed founder, but on the imprudent investor.

The nice thing about SV is not just the big pool of investors, but the big pool of prudent investors who don't behave foolishly.

Re: How startups should die

#38

Post by sanderjd »

smtddr wrote: post #31
connerbryan wrote: post #28

Earlier quoted context omitted.

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

A rule my father taught me when I was young. "Never loan money to a friend with the expectation that you'll get it back, be ready to just let it go."

Yes! Except I would phrase it differently: Never loan money to a friend or family member - either give money or don't. Oftentimes, the person you gave money to will later give you as much or more than you gave them, but that isn't a loan repayment, it's just them being kind to you in the same way you were kind to them.

To hnriot, who I can't respond to: No, it's not being a chump to willingly give money to those you are close to. The other side of the "be willing to give money to friends" coin is "be aware and careful of who you consider friends". You may be a chump if you give money to people actively taking advantage of your willingness to do so, but those people aren't friends. You should never give money to people who aren't your friends, and you probably shouldn't loan it to them either, unless you're in the lending business.

Re: How startups should die

#39

Post by fludlight »

tomasien wrote: post #17

I wrote like 10 topic sentences for comments about shutting down a company and then just erased them, because what a horrible set of memories that topic brings out. I like reading about failure from Jason because he's had a win and is on his way to another, so he can talk about it with a pretty even mind. Personally, I've only got like 10% of a kind-of-win since shutting my first company down, and it still makes me a…

The good thing about business is that you only need one win.

Re: How startups should die

#40

Post by smtddr »

sanderjd wrote: post #38
smtddr wrote: post #31

Earlier quoted context omitted.

A rule my father taught me when I was young. "Never loan money to a friend with the expectation that you'll get it back, be ready to just let it go."

Yes! Except I would phrase it differently: Never loan money to a friend or family member - either give money or don't. Oftentimes, the person you gave money to will later give you as much or more than you gave them, but that isn't a loan repayment, it's just them being kind to you in the same way you were kind to them. To hnriot, who I can't respond to: No, it's not being a chump to willingly give money to those you…

@OffTopic You can't normally respond to comments that have been recently made unless you click on the word "link" next to the comment. I would reply to hnriot, but I already see he's being downvoted so hopefully one day he'll understand why.

Also, I agree with everything you said. ^_^

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