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How startups should die

blog.42floors.com

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Re: How startups should die

#41

Post by telephonetemp »

rmason wrote: post #22
rubidium wrote: post #14

Earlier quoted context omitted.

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 con…

Interesting story. Did your grandfather make the money to pay off his creditors through entrepreneurship? How did his career go once he had paid off the debt?

Re: How startups should die

#42

Post by mattzito »

YokoZar wrote: post #32
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?

It depends (imo), on the amount of money you have left and who its from. If you've raised $1m from well-to-do-but-not-rich family members and with $500k left you're realized you're totally unqualified to be in your business, or the concept was terrible, no valid pivot, etc., then yeah, give the people back your money.

But if you've raised $1m from professional investors and you have $100k left, for example, you might be better off trying to double down or raise more money.

Re: How startups should die

#43

Post by nobodysfool »

jaf12duke wrote: post #20
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…

Jason (OP) here. Yep, know that feeling. Well. Would love to have you over to the office to chat. Ping me offline. jason at 42floors

Seriously, no way would I pay a bill that the business owed when it was shutting down out of a personal credit card. It's the business, not you who is liable. Also, if you can pay on a credit card, you can pay the business on a payment plan and it will cost you a lot less.

Re: How startups should die

#44

Post by nobodysfool »

Causalien wrote: post #25

I am in the process of shutting down my first company and I would like to thank you for sharing your experience because every decision I make right now has huge ethical implications.

Don't pay your debts on credit, that's just idiotic. If you can pay a credit card company monthly, then you can pay your debts the same way as well.

Re: How startups should die

#45

Post by [deleted] »

smtddr wrote: post #40
sanderjd wrote: post #38

Earlier quoted context omitted.

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. ^_^

[deleted]

Re: How startups should die

#46

Post by noonespecial »

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."

There's a special name for money you loan to friends and family. Gift.

Re: How startups should die

#47

Post by [deleted] »

[deleted] wrote: post #45
smtddr wrote: post #40

Earlier quoted context omitted.

@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. ^_^

[deleted]

[deleted]

Re: How startups should die

#48

Post by Ologn »

fludlight wrote: post #37
larrys wrote: post #29

Earlier quoted context omitted.

"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…

> This is why you never invest more than you are willing to lose.

Absolutely. It can also skew the decision-making process. People investing more than they can afford to lose are not going to be giving helpful advice or making the right decisions for the business.

Re: How startups should die

#49

Post by taroth »

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…

I keep this picture of Elon Musk open permanently in one of my Spaces. When feeling unmotivated or risk-adverse, I'll imagine what he would say if I was sitting in the backseat of the Tesla.

http://imgur.com/4tsZOIf

Re: How startups should die

#50

Post by davemel37 »

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."

If you lend $20 to a friend and never hear from him again...it was worth it!
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