Why We Shut Newstilt Down

http://blog.paulbiggar.com/archive/why-we-shut-newstilt-down/

by mchafkin • 16 years ago

140 96 16 years ago

blog.paulbiggar.com

robertg• 16 years ago

I stopped reading after this...

"None of these problems should have been unassailable, which leads us to why NewsLabs failed as a company:

     * Nathan and I had major communication problems,
     * we weren’t intrinsically motivated by news and journalism,
     * making a new product required changes we could not make,
     * our motivation to make a successful company got destroyed by all of the above.

Overall, the most important of these are that Nathan and I had difficulty communicating in a way which would allow us save the company, and that this really drained out motivation."

Maybe you should figure this shit out before you take someone's hard earned money.

pbiggar18• 16 years ago

> Maybe you should figure this shit out before you take someone's hard earned money.

If we could have anticipated our mistakes, we wouldn't have made them.

dannyr2• 16 years ago

Paul,

I'm curious. How long have you known each other before you became cofounders?

_delirium• 16 years ago

> Maybe you should figure this shit out before you take someone's hard earned money.

Unless the investors were lied to, I think they're fully responsible for what they do with their "hard earned money". Nobody forced them to hand over their money to anyone else, or prevented them from asking more questions before doing so.

wccrawford• 16 years ago

2 other points he didn't grasp:

1) I had no idea NewsTilt existed. I make my living on the internet. I should have known about it.

2) The name suggests to me that they will put a slant on the news. I like unbiased news, and most other people at least pretend to. Also, 'tilt' is slang for 'fail'. That doesn't come to mind immediately from the name, but the association with the word is there subconsciously.

thinkalone• 16 years ago

I remember hearing about it when it launched, when people raised some of your same concerns. It's interesting to look back on the initial reactions as part of the postmortem:

http://news.ycombinator.com/item?id=1264477

http://www.reddit.com/r/IAmA/comments/bwrew/iama_founder_of_...

pbiggar18• 16 years ago

The major problem is 1). We did not do well at publicizing either ourselves or our journalists.

People brought up 2) a lot, but I don't feel it was as bug a problem as almost anything else I put in the post. Our major competitor was called "true/slant", and it did they little harm (but then they built their brand around that, so it's a little different).

brandnewlow6• 16 years ago

I have several friends who were writing for True/Slant when you guys launched. They all were aware and wanted you guys to drop dead as they had already gambled with this other j-startup and now there was a second one casting doubt on their original choice.

Of course 5 months later, both projects are dead and gone under less than ideal circumstances.

I actually was invited to and attended a planning meeting for True/Slant's Chicago people. They asked me to be there so I could explain how they could use Windy Citizen to promote their stuff. They seemed like good people, but I suspect their content was too earnest to really make a go of it. They had the same problem you did:

Without naked women, it's pretty hard to build eyeballs on the web.

cynicalkane• 16 years ago

Maybe I play too much poker, but I interpreted "tilt" as a sort of crazy streak. As in, here's a bunch of people going nuts about the news.

bobds• 16 years ago

Pretty thorough post-mortem.

"we weren’t intrinsically motivated by news and journalism"

This stands out among the numerous issues the company had. If you aren't passionate about something but still want to do it, make sure it's very easy and won't take up too much of your time. That wasn't the case with NewsTilt.

flyosity• 16 years ago

They built a product that they didn't use. His entire post-mortem could have been that one sentence and it still would've taught a ton of entrepreneurs a great lesson.

VladRussian• 16 years ago

So, basically an attempt to racket 20% off the money earned by other people failed. Nice try.

il4• 16 years ago

I'm surprised YC funded something like this. The only reason someone would give up a significant chunk of ad revenue to a middleman vs starting their own blog/site is if that middleman was an established site and can deliver lots of eyeballs to their content.

Giving up ad revenue for a site that offers no additional value beyond hosting your content is madness.

pbiggar18• 16 years ago

That wasn't the plan. The plan was that we'd do absolutely everything for them, not just hosting. For example, we'd build whatever features they needed, such as tools for deep analytics of their user base; we'd do all their social media marketing; we'd run their events, job boards, etc; we'd spend a great deal of time working on providing eyeballs and on working out how to monetize their traffic.

If we had solved these problems, 20% would have been a very reasonable cut I believe.

jacoblyles2• 16 years ago

80% to the author is a hell of a lot better deal than any traditional corporation will give.

il4• 16 years ago

Technically, it's 80% of the 70% Google leaves publishers after taking its cut.

albertsun3• 16 years ago

Yes, but at the traditional corporation it'll be a smaller percentage of a much bigger pie.

il4• 16 years ago

"Getting traffic is really really difficult. We completely underestimated how difficult it would be, largely because I’d never had a problem with it in the past."

For anyone else building a startup without a concrete plan to get traffic, remember this post. Getting traffic will ALWAYS take more time and money than you think. The "if we build it they will come" mentality is a recipe for failure.

dabent• 16 years ago

This a thousand times. I understand that not all traffic is created equally, but there's no value in no traffic. Technology problems can be surmounted. Solving the traffic problem is hard.

robryan2• 16 years ago

I think a lot of startups get that mentality that what they are building is good enough that people will just come. Also many startups don't want to have to pay for traffic and are banking on launch publicity to kickstart things.

I think though if you have the money, or you can at least break even on the users you are paying for it is going to give you a much better start than just hoping people learn about the site from press/ word of mouth.

dannyr2• 16 years ago

"There was a point when I was over in Cambridge with Nathan and the other developer, and I noticed that the developer wasn’t working on a Sunday... If your first employee doesn’t love what you do, doesn’t wake up each morning dying to work on HIS product, you have likely chosen poorly, and that’s exactly what we did."

I left a company before because I was being pressured to work at least 12 hours a day plus weekends. (I was averaging about 10 hours a day & worked about 4-6 hours on weekends).

I asked the CEO that he should motivate me. He said that I didn't need to since I was already getting paid a lot of money. I gave my two-weeks notice the next day.

It's possible that you hired the person you want for your company but you were not motivating him enough to work long hours.

rick888• 16 years ago

"It's possible that you hired the person you want for your company but you were not motivating him enough to work long hours."

I don't know what would motivate anyone to give up their personal lives and most of their free time for a company that wasn't even theirs. Motivation to me would be a large stake in the company.

Anyone not getting this for giving up their lives to a company is a fool.

robryan2• 16 years ago

Even then, in a product with very little traction you would have to really believe in what you were doing. Had that guy took equity and continued to work his ass off it would have most likely been a waste of time.

Interestingly I wonder if the extra hours were really making a difference on the technical side, it sounds like the majority of issues, bar the domain and facebook stuff, were not technical ones.

greendestiny• 16 years ago

Yeah that didn't really sit well. Especially considering he mentions elsewhere someone else working for free, not to mention the journalists who worked for free, or the investors as well. I start to see why the other founder might have been really pissed when in the middle of it all this guy went on his honeymoon. Also this guy is a programmer but was too busy CEO'ing to do any of the technical stuff - especially when the idea could have been implemented by customizing wordpress.

I think there is a lot more soul searching to be done here about from the magical ability of the 'right' idea to motivate you. But I do absolutely concede my limited understanding of what went on comes from a couple of blog posts.

Swizec4• 16 years ago

Maybe I'm just too European. But everybody deserves a day off once a week.

Developers (anyone really) that are too tired to think are useless to a company. Let people get their rest and their time spent working will be much more productive.

Isn't there a book about this? Myth of the man month or something like that?

dennisgorelik• 16 years ago

The book title is "Mythical man-month", but it's that much about overworking. The book is more about making [in]accurate forecasts.

pbiggar18• 16 years ago

It's not that you demand every working moment of your employees time, it's that you need it.

One of the things you're quickly taught is that you do everything you can to ensure the success of your startup. You need employees with the same priorities and intrinsic motivation as you have, or else you're less likely to succeed.

sx• 16 years ago

Totally agree. I started my company 4 years ago. We have been pretty successful so far (several millions in revenue and big customers). There are times that people need to work a lot but there is no way you can work 7 or even 6 days a week in a sustainable fashion, not even at the beginning. I never expected people to work on the weekends although sometimes they do. Of course, I never expected people to work more than me either. Most of them are extremely productive during normal working hours. I don't think having a life means you are not motivated.

Also, hours that somebody appears to be working is definitely the wrong metric for developers.

brandnewlow6• 16 years ago

If your company can only succeed if people work on weekends or work for free, you don't really have a real company.

pbiggar18• 16 years ago

Bear in mind we had just launched and had completely failed to build everything our customers needed.

I'm aware that your startup is going much better than mine, but there are no tech startups where people don't work evenings and weekends at the start.

Free was because someone offered to work for free, and we didn't have the resources to pay her. We were going to pay her when we raised money, and we had agreed a rate. In the end, we paid her based on her estimated number of hours worked.

jselzer• 16 years ago

Exactly... I also wonder about calling it "HIS product" in reference to the employee. If he is only an employee, it is not HIS product, it is the company's product (and the OP's, as a founder/owner).

In my opinion, intrinsic motivation for a project isn't something that you either have or don't have by nature. It is something that is built and nurtured by a variety of external forces (team members, education, working conditions, etc) until the act of performing a task is rewarding in and of itself.

Expecting early-stage employees to be intrinsically motivated while ignoring environmental factors that may be eroding that motivation is unrealistic.

pbiggar18• 16 years ago

Your first employee is almost closer to a founder than to an employee. It wasn't "HIS" product, which was precisely the problem.

gurraman• 16 years ago

So I guess that this is the best coverage these guys have had so far as I'd never heard about the site before.

I know nothing about the history, but what about a little patience?

riffer• 16 years ago

And finally, they didn’t expect a cent back, telling us to give all the money back to our later investors. Not once in my whole time at YC did I believe that they valued their investment more than they valued us, and they were OK with us closing down. YC is a class act.

Personally I find this to be one of the best endorsements of YC that I've read. How people treat you when things don't work out is really, really important.

steveklabnik• 16 years ago

Thank you for the intensely personal and heartfelt postmortem. It seems like everyone else in this thread is knocking you guys, but I'm glad to be able to learn from your failures.

I was sad to see you guys fold. I really liked your idea.

CapitalistCartr• 16 years ago

My law of girlfriends and employers: You learn more about them when you leave than at any other time. This speaks highly of YC.

hugh3• 16 years ago

Article could have used a bit more explanation of what newstilt was, given that (a) I'd never heard of it and (b) it's been shut down so I can't look at it.

marknutter• 16 years ago

I can see 37 signals writing a big fat "told ya so" post about this soon.

albertsun3• 16 years ago

Did either of the founders have experience in the news industry before starting the company? From a brief search, it doesn't look like it. And from the way he's writing about journalists it sure doesn't sound like it either.

I'd say that that doomed the company from the start.

Doing a journalism startup just doesn't seem like a good idea if you have no understanding or experience of how doing journalism works.

pbiggar18• 16 years ago

Neither of us did, no. Actually, we didn't start a journalism startup, we were doing a Disqus clone for newspapers. We migrated to the NewsTilt idea after Sequoia told us they'd never fund something relying on newspapers for success.

I see why you would think needing journalism experience is important. Of all the errors we made, I don't find that to be a significant one, hence not really mentioning it in the retrospective. I personally still believe that journalism is too set in its ways to save itself, and that it's white knight will come from outside it.

jrwoodruff• 16 years ago

How would you know this if you have no experience in journalism?

Newspapers may, as an institution, not 'save journalism,' but I'd bet my money that whoever does will damn sure have had experience in the field.

brandnewlow6• 16 years ago

The journalism experience is important because its a proxy for having that deep abiding passion for the industry that you admit you guys didn't have.

The problem wasn't that you guys didn't wake up and go to read BBC news in my opinion. The problem was that you guys didn't grow up wanting to be newspaper reporters and then start Newstilt after you went into journalism and learned that dream was endangered by the industry's collapsing business model.

rwhitman• 16 years ago

I once worked on a multi million $ ecommerce platform startup where none of the founders had experience with ecommerce or retail at all. The story is familiar - they blew resources on building the MVP product assuming they knew all they needed and did a huge successful launch with big name sellers seeding the marketplace. But the numbers dropped off and the sellers became more difficult to retain. They learned some hard hard lessons with a $1m product build that fell flat on its face - for primarily reasons that were completely obvious to anyone in retail. The team was distributed across continents and they couldn't iterate very fast at all. They wasted the rest of their cycles and investor cash fixing these problems until they went broke and collapsed. It is sadly a pretty common scenario

Much of what you cite as an error is the direct result of not having understood journalism out the gate. It sounds like you spent a lot of your early resources trying to understand journalists and the news reader audience - after you built the product. Had you known more about the field when you began, how many of your core problems would have been solved in the design phase?

JesseAldridge• 16 years ago

"Motivation" is mentioned several times.

Reminds me of that quote, "Courage is not the absence of fear, but the overcoming of it."

Maybe you could say, "Success does not come from motivation, but from overcoming the lack of it."

mikeklaas• 16 years ago

So, they decided to shut down after only two months, and if I understand correctly, during the first month (May) one of the co-founders was almost completely in absentia, according to http://www.poynter.org/column.asp?id=45&aid=185999 ?

markkat• 16 years ago

That's too bad. Thanks for the honest insight, and best of luck on your next ventures.

xentronium2• 16 years ago

1. It's okay to fail; if you never fail, you probably never try.

2. If I were you, I'd probably try to resolve the problems instead of closing the project. Things like facebook login not working on subdomains should not be show-stoppers, really. Find a workaround, I dunno, proxy login or anything.

3. Early releases are good, but you have to provide minimum viable product.

4. I didn't know a thing about newstilt till today which means you had some marketing problems.

5. Don't listen to the guys counting other people's money :) There's always some risk involved in startups, every investor knows that.

6. Probably you had to do some better research before launch. This way you'd know all about your readers.

7. As a developer I'm not with ya on those "should work at sunday" parts.

My 2 c.

brandnewlow6• 16 years ago

This is a great, insanely useful, honest, and detailed autopsy on a startup. Thank you for writing it, Paul. You've done a lot of people a valuable service in sharing this information and your experiences.

I have to admit, a small piece of me is dancing a little jig, not at their demise, but because they ran into the same walls and hurdles I ran when I started WindyCitizen two years ago. I can't tell you how cathartic it is to read all this stuff. So much truth here.

Example: Working with journalists is tough because almost all of them overvalue their work to an extreme degree, especially older ones who wrote for print. Longtime print journalists were paid solid salaries to fill space in between ads in their papers. They figured if the paper's circulation was X, that a good portion of X was reading their stuff. In fact, it's quite possible no one was reading their stuff and their value wasn't in producing good journalism so much as it was in being able to write something vaguely coherent reliably and safely to fill up space between ads.

Try explaining THAT to an old hand print journalist. Those are fighting words.

But young journalists today understand this. They know that you're only as good as your audience so they're out building them. Check out my friend Tracy Swartz: http://twitter.com/tracyswartz She covers transit for the Chicago Tribune's commuter paper and is a rock solid reporter. I respect her work very much, but moreso I respect how aggressive she is in building a real following and brand around her work so that no matter where she goes after this job, she's got an audience to take with her. Older journalists don't get that. They were used to thinking the audience just magically appeared when they committed an act of journalism.

Anyhow, reading that stuff was like having a weight lifted off my shoulders. Thanks.

Background: My original idea (fresh out of journalism school) was to do a Huffington Post for Chicago. I was doing it solo and sans funding however. I was able to sign up about 20 writers, and they were the good hungry ones who want to stir stuff up, but as a solo founder I wasn't able to recruit writers, direct them, edit their stuff, post the stories (we went with Drupal and the posting ui is really terrible so our writers would e-mail me their stories), promote the stories to get eyeballs on them, then find advertisers and sell ads to them....etc etc

It just was a no-go. So after 8 months of that, I replaced our front page with a Digg knock-off and invited our readers and bloggers to start sharing and voting for their favorite local stories. Traffic slowly picked up to where we were hitting 100k uniques/month, I found someone to work on ad sales, and we eventually reached a shaky ramen profitability as a local Digg-clone with often-spotty tech.

Through this all though, a handful of our writers kept blogging and over the last year we have a few who've managed to build small but regular audiences for their stuff.

Two years later, we're starting to recruit writers and bloggers again and its fun to watch.

It took 24 months longer than I expected and there's still lots to happen, but Windy Citizen is definitely a worthwhile read for a certain segment of Chicago due to the ingenuity of our writers and community members.

Anywho, I'm sorry to hear NewsTilt didn't work out but thank you for your honesty and candor in sharing this. Cheers.

8ig8• 16 years ago

For convenience, here's the Windy Citizen link: http://www.windycitizen.com/

Edit: Fixed site name.

annajohnson• 16 years ago

"Lesson: Deeply care about what you’re working on"

This was one of the lessons-learned that resonated with me. My husband and I lacked passion for the first startup we co-founded back in the late 1990s and although we were profitable and did sell the business, I know that had we cared deeply about it we would have been 100x more successful. When you care deeply about something you do all the 'little' things that make ALL the difference.

More generally, I would like to thank Paul for his post. In fact, it may just be mandatory reading for anyone starting or planning to start a business. Even if you don't agree with Paul's assessment of NewsTilt's demise, it makes for a great case study, precisely because it inspires us to think about what went wrong, what should have been done, etc. In fact the combination of the post and this thread is precisely the kind of discussion I find so instructive.

points2• 16 years ago

"Lesson: If you think you should build it, not buy it, you’re wrong"

That's bad advice IMHO. There is far more value to building than buying - the amount you learn, and the extra optimization you can put in there.

If you have the luxury of being able to build it yourself, do.

pbiggar18• 16 years ago

I suppose to put it another way, you almost certainly do not have the luxury of being able to build it yourself.

points2• 16 years ago

Well, anecdotally, I did. I built a minimum viable product as a 'side project'. I had money to run it for a year before I needed to monetize. It worked for me. It means I use 1/10th the number of machines/bandwidth of one of my competitors.

I agree though, in your circumstance it was probably the wrong approach.

medianama• 16 years ago

You gave up too soon. It take much longer to solve any marketplace (chicken-egg) problem

efsavage• 16 years ago

"I noticed that the developer wasn’t working on a Sunday"

There are many obvious reasons why this company failed, and I'm surprised that YC gave them any money, but that statement jumped out as a huge red flag of "bad founder". If you think you _need_ 80+ hour weeks, or _need_ to work 6 days a week, never mind 7, you are already failing. Not only are you burning your people out, you're setting a bad example and demonstrating that your business is not viable.

Your people should be working normal hours from day 1. Save the extra hours for emergencies, or big (big as in couple times a year at most) releases or deadlines. If they want to tinker from home or spend a Saturday morning writing an email with ideas, that's when you know you've engaged them, but buying into the "we run on midnight oil" story of startups is just plain not smart.

projectileboy• 16 years ago

Couldn't agree more strongly. Of course in a startup you'll occasionally put in extra hours (I once spent 60 hours straight writing copy for a deadline), but if you think this should be the norm, then what the hell are you supposed to do when there's a real emergency??

Smart dudes who go four-wheeling in the mud only turn on the four-wheel-drive when they get stuck.

waxman• 16 years ago

Thanks for writing this detailed postmortem!

The entire story, though, can really be distilled into one idea: expectation settings.

You always want to under-promise and over-deliver, but it sounds like, in multiple domains, the Newstilt team did just the opposite. They promised a lot to their writers, to their investors, to each other. This happened in both obvious and subtle ways.

What's the problem with the wrong expectation settings?

Where to begin... First of all, it is human nature to raise expectations. You're afraid investors won't invest, developers won't work for you, journalists won't contribute to your site, your co-founder won't carry on: so you raise expectations.

The critical dynamic that screws everything up, though, IMHO, is that inflated expectations attract the wrong types of people. That's the killer.

Paul provided many examples of this. Over-promising to journalists attracted the wrong types of journalists; over-promising to users attracted the wrong types of users; over-promising to potential employees attracted the wrong hire.

If there's one lesson to takeaway from Paul's story it's: under-promise and over-deliver.

Start simply. Don't worry about being too simple. Just be honest, so you attract the right people at the right time.

muhfuhkuh• 16 years ago

Online content syndication, aggregation, or publishing schemes tend to see alot of troubles because the founders make the technology the value proposition rather than the content, which is relegated to commodity (at best) status.

I mean, look at how low an opinion brandnewlow (haha) has of veteran journalists. "Working with journalists is tough because almost all of them overvalue their work to an extreme degree". Oh, but I'm sure "digg knockoff + Chicago" is an earth-shattering technology well worth its price in Flooz.

As soon as you realize doing a content play based on writing is very similar to any other creative industry like movies, TV, or music, the sooner you'll respect the people who write for a living. They're not just replaceable crotchety cogs that make your content engine move. They're your sole source of revenue (if you do make an money at all).

Sincerely, A writer.

brandnewlow6• 16 years ago

Good points, but I'm being misread in a few places to make your points.

My point wasn't that writers don't have value, but that veteran journalists have an understanding of their value that doesn't sync up with how their output is valued in the context of today's media world.

I have an extremely high opinion of veteran journalists. I went into debt so I could attend graduate journalism school and learn at their feet for a year.

However, my great respect for their skills as researchers and reporters does not change my belief that they have an overinflated idea of the value of the actual product they were putting out with those skills. Great content has limited value unless you have the ability to distribute it to a lot of people. Great veteran journalists can make wonderful stuff but lack the ability to put it in front of a lot of people.

Sincerely, A fellow writer. Glad to see more of us on HN.

peteforde• 16 years ago

I tried to get involved in this early on, but I was quickly turned off by the way the project was being run: it felt like the founders were promising a vague end goal and trying to make too many groups of people happy.

http://groups.google.com/group/newslabs-qa/browse_thread/thr...

Kudos for writing all of this down, Paul. Next time, stick to your guns and do the simplest thing that works!

Why We Shut Newstilt Down

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