Lessons from a failed startup

http://venturebeat.com/2009/04/29/10-lessons-from-a-failed-startup/

by jasonlbaptiste • 17 years ago

103 37 17 years ago

vivekamn• 17 years ago

One of the best startup retrospectives I have read. Especially the points about marketing and user acquisition are very relevant to what I what I am doing currently.

zackattack4• 17 years ago

Anyone else think he was valuing his time too highly?

jacobscott• 17 years ago

If you think you can add 1mm to the value of your startup by working 12 hours a day 7 days a week for a year, then your time is "worth" $230/hour.

Also, considering what someone with a similar background could earn working full time for an established company (especially factoring in benefits), $50/hr is fairly conservative in terms of opportunity cost.

zackattack4• 17 years ago

Opportunity cost != time valuation

Tichy5• 17 years ago

It seemed rather low to me. If a "startup worker" is x times more productive than a normal employee, wouldn't it also make sense to value his time x times higher?

JesseAldridge6• 17 years ago

"2. Content businesses suck..."

This seems like a pretty strong argument in favor of some form of DRM. If content creators can't make money, we're not going to have good content.

zackattack4• 17 years ago

You don't need DRM to sell content.

JesseAldridge6• 17 years ago

You do if you want to make a lot of money at it.

File sharing is easy and getting easier.

Why pay for anything when you can easily get it for free?

Tichy5• 17 years ago

I doubt that their TV game show had a pirating problem.

JesseAldridge6• 17 years ago

Yeah, probably not. I was mainly thinking about this paragraph:

"I would advise any entrepreneur or investor considering content to think twice, as Howard Lindzon from Wallstrip warned us. Content is an order of magnitude harder than technology with an order less upside; no YouTube producer will earn within a hundredth of $1.65 billion. This will only become more true as DVRs and media-sharing reduce revenues and pay-for-performance ads eliminate inefficient ad spend, of which there is a lot. The main and perhaps only reason to do content should be the love of creating it."

The situation just kind of sucks if you ask me.

chris11• 17 years ago

I don't really see DRM as a good answer. It is usually pretty ineffective, and it can cause problems for your customers.

I'm not really aware of truly effective DRM. DRM just needs to be cracked once for it to be pirated. And there are people who actually enjoy cracking DRM.

I guess server side authentication would work, but that is only if you convinced people to connect to your servers. This is actually pretty hard. Spore seemed like it added value when it connected to the internet. But I am sure authenticity could have easily been verified with less restrictive DRM. And cracked copies were out before retail copies were out, so DRM was a total bust in that case.

WOW is one of the few companies that I don't think has huge problem with piracy. But that is only because you can't pirate the experience of playing with tens of thousands of other people. And even with WOW I was able to easily find torrents of the game and lists of private servers. So even MMORPG's get pirated.

Big companies have thrown millions of dollars at this problem already, and haven't come up with a good solution. So this isn't an easy problem. And I am under the impression that DRM is currently very expensive for companies.

Sure, DRM could be made better. But I think it is kind of pointless. If the authentication relies only on hardware that is under the users control, like a pc, it will get cracked. And you will almost certainly end up annoying your paying customers.

That said, I am interested in seeing how GOO turns out. A DRM solution that lets you legally sell your game sounds promising. And since Stardock built it, it might actually be customer friendly.

JesseAldridge6• 17 years ago

Crackable DRM isn't the problem. Casual piracy is the problem. Pretty much any security system can be circumvented; the point of DRM is just to make getting it for free sufficiently more of a pain in the ass than paying for it.

GOO does indeed look interesting: http://www.maximumpc.com/article/news/stardock%E2%80%99s_%E2...

tracy2• 17 years ago

Content creators can't make money... yet! Video content is expensive and difficult to produce because it has not become widespread enough for millions of people to actually be doing this.

For example, compare Word Processing to TV editing. Anybody can use a word processor on a PC...now. At the very start of things, a word processor on a PC was a specialised task. As the market grew, things became more automated and a lot easier.

YouTube and such are only a few years old. The software to make producing content really easy is not there yet - so there is still a lot that needs to be done manually. This software will improve and content production will get cheaper.

rsheridan64• 17 years ago

It's still going to be expensive to deal with actors, sets, animators, etc. I doubt better software is going to cut into the main portion of the cost of making a movie.

This model would lead to a lot of reality shows and things like that. Maybe machinima if it ever catches on.

raquo• 17 years ago

DRM usually leads to unusable content. Better solutions would be easy micropayments, bundling, etc.

gommm• 17 years ago

I don't agree with that... If the only good economic reason for making content is that you love doing it, then we're more likely to content made by passionate people....

Some content maker can make money on TV (with reality shows and the like) or as movies... but when you look at some of the commercially successful shows or movies are they really good content? Can you feel any of the passion of their creators? Same thing for some of the bland music produced by some of the big labels... I like content creator to have intrinsic motivations to create, not to be motivated by the potential rewards they could get by pandering to as many different segments of the population they can...

potatolicious• 17 years ago

You're right that content creators should have intrinsic motivation to create... but that's not what the GP suggested. He's suggesting that content creators should not be anti-motivated to create (via problems like piracy, for one example).

webwright• 17 years ago

Content businesses suck IF you are the one developing the content.

TripAdvisor is a content business and I think they are doing okay. ;-)

marcusbooster• 17 years ago

Content businesses suck because 1. it's hard, and 2. everyone thinks they can do it. Which explains all the bad content out there, a lot of people are unwilling to pay for professional production values out of ignorance.

But if you can find a way to stand out from the cruft you can charge quite the premium.

wensing• 17 years ago

"The main failure of PlayCafe was marketing."

Sort of buried at #5, so felt it worth repeating (and conversation here).

coglethorpe• 17 years ago

Well worth repeating. Most of us here can code a site up, some are exceptional at it. But even getting that initial press to get those first customers can be daunting.

That's one advantage I can see with something like YCombinator -- that initial traffic. It might not be much, but it's a few links from reputale blogs, some visitors and maybe even those first conversions. It's certainly no guarantee, but it is more than my first startup had.

Lessons from a failed startup

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