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

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

medium.com

Post reply on HN
Print view View original

41–50 of 180 posts

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

#41

Post by epa »

grizzles wrote: post #15
zer00eyz wrote: post #6

The underlying idea behind what he did here is sometimes called Ethnography. There was another great article a while back on this going on at adobe/photo shop: https://medium.com/startup-study-group/my-two-years-as-an-an... As far as tools go, ethnography can be very powerful in the right hands.

Great comment. Fantastic article. I wonder if they considered involving both sides of the contract from the get go. When I've negotiated small-mid size deals with other tech savvy folks, I've often thought a two sided chat style interface that I could use sitting next to someone or if they were across town would be ideal. The way I conceptualized it would be a 3rd party tool for making deals where the main feature is…

You're assuming both sides 1) play nice and 2) actually collaborate in that way. A lot of the time it is David (small corp) vs Goliath (huge corp) where David has to accept terms of Goliath on their standard deals or risk not completing the deal.

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

#42

Post by hyperpallium »

I guess that's why this top-down market hasn't been disrupted. This guy is seeing clearly. Cutting the old makes way for the new - it would be better if I did this with my own zombie business.

And now, the armchair brainstorming: focus on the "contract review and approval" immediate gratification and marginal user wins - if not sufficient benefit for them to buy, make it multi-month free trial, make it a year. After some "months of use", users get the delayed gratification. They become your sales force from within, and CIO's notice the long-term benefits, validated within their own company, and mandate its use top-down.

It's a long slow burn and mightn't work.

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

#43

Post by chris_va »

capkutay wrote: post #38

"I was deciding whether this venture was worth committing to another year of 70+ hour weeks. I need a higher level of certainty than investors do because my time is more valuable to me than their money is to them. Investors place bets in a portfolio of companies, but I only have one life." That's the key quote in the article. It's a fair decision from his standpoint but I wonder if saying that will lead investors to…

> I suppose the investors could also appreciate that he didn't want to waste more of their money if he didn't believe in the product.

Yes, very much so. Startup investments fail all the time, part of the business. Better a clean shutdown than trying to eak out an exit with money that could be better spent elsewhere.

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

#45

Post by epynonymous »

that's why i firmly believe you have to find the idea that you're really interested in because that's what will pull you through those 70+ hour work weeks or through those days where you're on the brink of failure wanting to fold shop. there are many ideas that are interesting and probably could be good businesses (lifestyle or startup), but can you overcome all those things not just on sheer will power, but just because that's what you enjoy spending your time on?

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

#46

Post by trustfundbaby »

chris_va wrote: post #43
capkutay wrote: post #38

"I was deciding whether this venture was worth committing to another year of 70+ hour weeks. I need a higher level of certainty than investors do because my time is more valuable to me than their money is to them. Investors place bets in a portfolio of companies, but I only have one life." That's the key quote in the article. It's a fair decision from his standpoint but I wonder if saying that will lead investors to…

> I suppose the investors could also appreciate that he didn't want to waste more of their money if he didn't believe in the product. Yes, very much so. Startup investments fail all the time, part of the business. Better a clean shutdown than trying to eak out an exit with money that could be better spent elsewhere.

especially if your heart's not in it for whatever reason

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

#47

Post by elliotec »

epynonymous wrote: post #45

that's why i firmly believe you have to find the idea that you're really interested in because that's what will pull you through those 70+ hour work weeks or through those days where you're on the brink of failure wanting to fold shop. there are many ideas that are interesting and probably could be good businesses (lifestyle or startup), but can you overcome all those things not just on sheer will power, but just bec…

Or bootstrap a lifestyle business with an idea that you're really interested in and spend exactly as much time as you feel like working on it, making money and not answering to investors.

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

#48

Post by e12e »

It sounds like most of the customers had a flawed process - or perhaps an actual process that was different from the process they felt they should have. Perhaps they were even in breach of some guidelines legal had drawn up, or even laws or statutes on acquirement.

And it sounds like the product automated a good, sound process. One that was different from the customer's actual, current process.

I don't know how one could hope to sell a new process (incidentally along with an automation framework) without massive training, and, well, consulting.

I'm a little surprised they didn't take the opportunity to pivot. Maybe none of their beta users were interested in the 100x(?) investment buying such a package would cost? It sounds like they found a different market, smaller in number of customers, larger in revenue - and chose to walk away because: software is fun, human process is hard and boring?

It's a valid choice to be sure, but it strikes me as a little odd. I thought the idealised, naive idea of a computer system being more important than the human systems it enables was more of a delusion limited to Silicon Valley, than a general problem.

I'm reminded of how model-view-controller was internally known as model-view-controller-user, and how shortening it to mvc[1] was probably a terrible mistake that obscured most of the valuable idea behind the concept (that of mapping the users mental model of domain knowledge to widgets on the screen and on to the data models used by the software).

[1] according to a talk Trygve gave, but it kind of shines through in his brief history of mvc too: https://heim.ifi.uio.no/~trygver/themes/mvc/mvc-index.html

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

#49

Post by timoth3y »

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.

2) I'm not saying there was no solution. There might have been, but the team and I could not find one. Think of it this way. You and a team decide to summit a mountain. It's a high-risk endeavor. After weeks of going over your maps and equipment you just can't see a plausible way up. Do you call it off or set out hoping you'll be able to figure it out. It doesn't mean no one can do it. I means I could not do it with that team and that equipment.

3) Why didn't we leverage the contract approval features that customers loved? We tried. The problem was that those kinds of approvals were not core workflow for SMBs. It was useful when importing contract templates, but was not used much after that. Nice feature but not important enough to get companies to sigh up for multiple seats, which is what we needed.

4) Whats going to happen to the code and to Tim? No decisions yet. I'm open to suggestions on both counts.

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

#50

Post by ben_jones »

encoderer wrote: post #24
joeemison wrote: post #21

Earlier quoted context omitted.

For evolutionary features, you're right. But I think the point in the article is that if you're trying to get to product-market fit, your customers' feature suggestions are rarely the ways to get there; you generally have to watch, think, synthesize, hypothesize, and iterate again and again to get to the solution that actually does what you need done.

That's a little too hand-wavy for me. I think you solve a problem, produce an acceptably bad solution, and as you get traction you improve it. You do it evolutionary because you're not Steve Jobs and improving something continuously is a repeatable, adaptable technique in a way that spontaneous invention isn't. If you never get traction, and can't crack it, then you invested a minimal amount and you can move on. A po…

I think product-market fit is more then just making sales. It's having a sustainable company that can "service" those sales in a sane way. If your company is completely back logged and getting by by cutting corner after corner, you're not succeeding.. you're teetering on an edge.

There's an argument for the mental health of the founders as well as the soundness of the company.

Post reply on HN