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

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

#91

Post by timoth3y »

lordnacho wrote: post #75

"When users are unhappy but can’t explain exactly why, they often express that dissatisfaction as a series of tangential, trivial feature requests." This bit resonates the most with me. I worked on a project worth little traction where we'd keep getting feature requests from the client facing team members for things that were of minor value but sometimes major effort. It grinds you down over time as you realise there…

Users mean well. Basically, they want to be part of the process. They are trying to help you solve the problem. It's way too easy to fall into the "If we just had this one feature" trap. Sales staff love coming up with feature requests and the developers love having something they can sink their teeth into.

It feels like progress, but it's not.

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

#92

Post by bkor »

nostalgiac wrote: post #62
onion2k wrote: post #59

Earlier quoted context omitted.

If the situation were really "take the money and do 70+ hours a week for a year" versus "shut down the business" then I'd agree, but that's a false dichotomy. You can run a startup putting in far less time than that; putting in long hours is a choice. You can bring in a team or outsource the parts you don't like. It makes it harder to succee but it's an option. You could (depending on lots of caveats) simply hand the…

Although the author phrases it as "70+ hours a week", my assumption is it's not the hours per week that he doesn't want to commit to it, but the total hours involved that it's going to require to solve the situation. Whether that's 70 per week or 5 hours per month, the total amount of hours needed is going to be x,00 or x,000 - and that's time he simply thinks is not a priority or valuable to him.

I don't agree on the assumption that the total number of hours is a given. If you're working on something 70+ days per week for an entire year, your productivity is going to drop. If you work less, but are refreshed when you start working, you'll be way more productive. Especially if it requires any amount of thinking.

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

#93

Post by mediascreen »

vertex-four wrote: post #90
mediascreen wrote: post #83

Earlier quoted context omitted.

I think Graham's definition aligns much better with general usage of the word than a definition that would make the new ice cream stand at the corner a startup.

Really, only on HN and other "startup forums". Anywhere else... well, do you think even an ice cream stand is immediately a viable, profitable business? Usually not. The space between "having a registered company" and "actually in the black and stable" is a startup.

I would still say that, to most people, a startup implies more than just a newly started business. I have never seen or heard someone who has just started a small brick and mortar business (without grandiose expansion plans) refer to it as a startup.

That said, I'm not a native english speaker and I don't live in US - maybe it's more common than I think.

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

#94

Post by chaostheory »

timoth3y wrote: post #49

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.…

"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."

From what I've read (and I could be wrong), it just sounds like you burned out. From personal experience, it's super difficult to keep up the energy and morale when you're either solo or semi-solo (when your cofounders aren't full time like you are). Part time cofounders are better than no one, but they're nothing compared to a full time cofounder who's with you in the trenches.

Good job on lasting as long as you did on that death march.

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

#95

Post by taytus »

timoth3y wrote: post #49

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.…

I don't know man, $500k is a LOT of money to even pivot to the next Uber for X. I might be totally wrong, but I think you are just burned out. Best of luck!

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

#96

Post by pedalpete »

timoth3y wrote: post #49

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.…

I had a very similar experience to yours (with the exception of partners and investors). I was building a staff scheduling system, launch with beta testers who tried it out and then suggested they'd start using it when it had feature x or y. I'd implement feature x and then they'd say they'd use it when they had feature z.

I came to realize that the challenge is in the changing costs. They already had a product that could do more than what they could do with the systems they had at the time (mostly excel). It did a bunch of reporting and shift swapping etc. etc. but there was no way it wasn't getting momentum.

Thing is, I just wasn't passionate enough about it to make it a product I would love working on for the next 10 years.

A few people here say you're burned out, maybe you are, but maybe there are other projects you're more passionate about.

The project I'm currently on I'm not madly passionate about as a product, but other people love it, and it is fun to move the levers and see the affect on traffic and the (potential) business.

You're definitely not alone in your thoughts on this one, I can appreciate where you're coming from. Hopefully you look back at this as a great decision.

Better things ahead!

(great writing style btw)

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

#97

Post by LionessLover »

seibelj wrote: post #55
cft wrote: post #54

Earlier quoted context omitted.

When PayPal started, they were beaming money between PDAs. Then after a while when their curves were no good, they noticed that some confused users thought that their Confinity website that described how to beam money, was actually the place itself to transfer money to others. Then they pivoted. Then this new product was not viral. Then they started paying $10 when you open the account.

Please don't down vote this comment. He is making a salient point about why it might not be a good idea to quit at such an early stage. Whether it was the right decision for Contract Beast or not, he is trying to provide a counterpoint to the idea of giving up by providing an alternative anecdote. Some people in a similar situation could use the boost.

The "salient point" as you put it suffers from a huge acute case of selection bias and survivorship bias, two deadly diseases that kill the argument immediately after it's born.

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

#98

Post by hyperpallium »

hyperpallium wrote: post #42

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…

Still fascinated! Couple ideas using Crossing the Chasm (CtC):

1. Your vision is crucial to your determination. Your vision is disrupting SMB CLM with "huge gains in accuracy and efficiency". You can only start the fire with those also inflamed with your vision - those who care. It seems only CIO's (anyone else?). The CtC idea is to target those few adventurous CIO's ("visionaries") who want to leapfrog the competition with this new, unproven approach. Reach them through those very, very few CIO's who are excited by the idea itself ("enthusiasts") - just because it's a clever, efficient, elegant approach to a broken process. They exist, just not many.

So: if you try to appeal to users, it must be those users who are excited by what causes the "huge gains in accuracy and efficiency". Otherwise they'll carry the wrong torch to the CIO.

2. The other CtC idea is "niches": pick out the types of customer who would really benefit from your solution. e.g. inaccuracy causes chronic problems for them/losing customers/bad publicity; CLM is a dangerously high cost center; they can't keep up with sudden demand and are losing sales; they can't adjust to changing contracts, and lose opportunities; (new) regulations/legislation makes inaccuracy very expensive. Plus, it would open up a new market; overtake a competitor; resist a competitor. These also excite upper management.

Applying it gratifying users: are some businesses constantly approving contracts, and importing templates (or should be)? Maybe during M&A; law/consultancy firms?

Choose your customers to suit you.

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

#99

Post by aedron »

lordnacho wrote: post #75

"When users are unhappy but can’t explain exactly why, they often express that dissatisfaction as a series of tangential, trivial feature requests." This bit resonates the most with me. I worked on a project worth little traction where we'd keep getting feature requests from the client facing team members for things that were of minor value but sometimes major effort. It grinds you down over time as you realise there…

> Sometimes it feels like the people giving feedback are just too eager to please you with positive feedback.

This is an important observation. As someone once said, "no one wants to crush your dreams". If you present people an idea for a business plan, most people will say that is sounds very interesting, nice opportunity, they'd definitely consider buying that, etc. If you show them something you made, they will say it's great and politely have a little conversation about it.

It is very easy for perennially optimistic (/self-deluded) entrepreneurial types to take this kind of feedback as validation, when in fact it is nothing of the sort. The only validation is this: Are they giving you money for it? That is when you know you've made something of value, not a second before.

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

#100

Post by timoth3y »

chaostheory wrote: post #94
timoth3y wrote: post #49

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.…

"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 th…

Tired certainly, but not burned out. If we could have come up with an approach to solving the problem, I would have been 100% on board.

I have no problem working 70+ hour weeks for something I believe in. I've done it before, and there's a good chance I'll do it again. Just not on this project.

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