What I Learned From My Startup Failing

http://snapsummit.com/conference-news/7-things-i-learned-from-my-startup-failing/

by ChristianPerry • 17 years ago

72 27 17 years ago

mbrubeck• 17 years ago

"Companies succeed with single founders all the time. Just look at Digg, Craigslist, eBay, Netflix, Wordpress, Wikipedia, Amazon, TechMeme, PBWiki, TechCrunch, TechMeme, and Etsy."

Is this true? I know it's hard to define "founder" precisely, since some co-founders may get involved after the idea is partly baked, or may not have as much of an impact. But several of these seem to be questionable. (And Techmeme is misspelled... twice.)

http://en.wikipedia.org/wiki/Wordpress - "It was first released in May 2003 by its co-founders Matt Mullenweg and Mike Little as a (considered the official) successor to b2\cafelog." (Or if you meant Wordpress.com / Automattic, it also has multiple co-founders.)

http://etsy.com/about - "Etsy was founded by Rob Kalin, Chris Maguire, Haim Schoppik and Jared Tarbell in June, 2005."

http://en.wikipedia.org/wiki/Netflix - "Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software, along with Mitch Lowe."

http://en.wikipedia.org/wiki/Digg - "Digg started out as an experiment in November 2004 by Kevin Rose, Owen Byrne, Ron Gorodetzky, and Jay Adelson."

http://en.wikipedia.org/wiki/PBworks - "PBworks (formerly PBwiki) is a commercial collaboration service created by David Weekly, with Ramit Sethi and Nathan Schmidt joining shortly thereafter as co-founders."

http://en.wikipedia.org/wiki/Wikipedia - "Launched in 2001 by Jimmy Wales and Larry Sanger..."

ChristianPerry3• 17 years ago

You're right -- "founder" is a tough measurement. A lot of times -- as in the case of my own company, RFOP -- one person starts a company, sees a bit of success, then quickly brings on a small group of peers who join with the "co-founder" moniker.

As a company grows, it quickly evolves from a solo effort to (some variation of) a team effort. This can mean bringing on employees, or people who join as "co-founder." At PayPal, for instance, more than a half-dozen of the first employees were accorded "co-founder" status, which is why the company appears to have so many.

Further complicating the matter, many companies change their story after they reach success, presenting a company as a joint effort or team project, rife with co-founders and collaborators, when the truth is closer to one visionary bringing an idea to life, and assembling a team thereafter.

For instance, Digg. I was at a dinner a few years ago and had the pleasure of sitting next to Owen Byrne, one of the people mentioned above. Owen wrote the original code for Digg. He told me that Kevin Rose found him off of ELance. Until then, he was a fairly unknown Canadian programmer. His success has surely increased since taking on what started as a $2,000 contract gig, but I hesitate to call him a "co-founder."

99 times out of 100, companies build teams in order reach success. However, in many of those circumstances, that kernel of success starts not with a small team reaching consensus, but a single visionary with a single vision.

ojbyrne3• 17 years ago

Obviously I'm biased, but Kevin had little if any vision other than finding a new job. And he was much less known then he is now, after a careful, well-crafted and expensive PR campaign. And yes, I was an "unknown coder" but also an MBA, Ph.D candidate, and I spent years haranguing the business editor of our local paper about how corrupt the news business was. Many people I respect have summed up Kevin in a single word - "shallow."

And to reiterate, elance was not involved in digg. That also was part of the PR campaign.

Harj• 17 years ago

wikipedia and craigslist are such outliers in so many ways, they don't add much support for the single founder argument at all

pg• 17 years ago

Amazon also had two founders, Bezos and Shel Kaphan.

dataman85• 17 years ago

In his linkedin profile Shel Kaphan describes himeself as Amazon's first employee.

mrshoe• 17 years ago

4) Talk to people and listen to them closely The world, collectively, is smarter than you are — pay attention to it.

I feel like a lot of great companies would never have been built if the founders didn't ignore a bunch of naysayers. That said, if you get your product into users' hands early and often and nothing you do can persuade anybody to like it, you're probably better off not wasting any more time on it.

5) The fewer heads, the better

I'm going to have to agree with pg and say that going it alone is a bad idea. You need multiple, complementary skill sets. You need to balance out mood swings. You need varied backgrounds and bodies of experience to provide multiple perspectives on all the problems you'll undoubtedly face.

However, I can totally relate to the author when he says, "On many occasions, I’d come up with a new, inspiring idea, only to get a knot in my stomach before pitching it to my team."

I think it's important to cultivate a culture where it's perfectly acceptable to throw crazy ideas on the table and get them shot down. In fact, I think the more ideas you can burn through, the better. Creativity is an iterative process. Often times your crazy, will-never-work idea will spark a brilliant idea in the mind of one of your cofounders.

On a related note, we've found that getting a 3 person consensus on everything is a broken model. For any given decision there should be exactly one person responsible for making it. You can either divide up the problem space or you can just defer to the same person on everything. We even decided to rotate who gets to wear that hat every 4 months, to give everyone a chance and to make sure we don't stagnate.

ChristianPerry3• 17 years ago

4) Yes, you're right. Naysayers do abound. I refer to the world's "collective" opinion because, yes, it's all too easy to find a token naysayer who's eager to shoot you down.

That said, once you have a beta out, or some kind of working concept, the world becomes your sounding board -- where else, after all, will you get your users and customers? While it's important at some point to ignore what people think, it's just as important to keep at least half an ear open to their thoughts and opinions. I believe that you can learn more by listening deeply and attentively to people than by ignoring them.

5) As I said in the post, teams work for a number of people. They're one of the most common structures for getting companies off the ground. In the case of companies with strong technical needs, they can be particularly helpful, as different people can bring different skill sets and perspectives that may prove to be instrumental.

That said, I challenge the widely-held assumption that a founding team is necessary, vital, or inherently "better" than starting a company by yourself, and bringing people on later.

I hold that a single person, charged with focus and determination, can launch a concept with speed and single-mindedness that's difficult to replicate in a team environment. A team, despite the benefits it confers, adds added complexity to decision-making, and can dilute an idea as easily as it can rally behind it.

flooha• 17 years ago

You can only bring on people later if you are successful, but becoming successful on your own is so damn hard and psyche destroying, if you don't see some success in a reasonable amount of time, you won't get there alone.

Do your next startup alone and come back and tell me if having two other bright and motivated people standing next to you is a bad thing.

zackattack• 17 years ago

This FailCon advertised on the blog looks like a terrible idea. Why are the Meebo founders speaking? Meebo isn't profitable. There are only like two people from profitable companies there.

christonog• 17 years ago

1) Pick a problem and solve it.

Interesting, Christian never mentioned any of the "problems" Trogger wanted to solve. It does seem, at first glance, that this idea was a solution looking for a problem.

ChristianPerry3• 17 years ago

You're absolutely right. This was one of our biggest failing points from the time we started. We built a cool, graceful, elegant solution... that ultimately solved little.

jwhitlark• 17 years ago

I would really like to see a Tufte style graph showing: a) number of people involved over time, b) % of time spent by each person, and c) profitability for the same time period, with a wide range of failed and successful startups.

Assuming one could come up with a way to clearly display that information.

EvilTrout• 17 years ago

When you’re met with confusion, doubt, and dismissal, it’s time to reevaluate. The world, collectively, is smarter than you are — pay attention to it.

I learned exactly the opposite from my startup. I was met with blank stare after blank stare as I explained my idea over and over.

As it turns out, if you are going after a non-mainstream market as I was (Internet culture), you're going to get this reaction a lot.

Okay, so my startup isn't huge. But it pays for itself and my modest salary. It's been 3 years now!

patio11• 17 years ago

This works across the niche spectrum from "Internet forum trolling simulation game" to "bingo card creation software". Customers validate ideas -- the opinion of non-customers is irrelevant.

9oliYQjP3• 17 years ago

You're giving up after less than a year? I have a rule of thumb. I think that If you want to start a startup, make sure you're willing to devote at least 3 years to getting it going. Otherwise, don't bother. It's difficult enough to get a business off the ground at all, without trying to do so with an extremely tight time constraint. A corollary to this rule I suppose is that you should ensure that you have 3 years worth of resources and motivation before deciding to take a gamble on a startup.

I know it's easier and quicker to create a web startup today, but remember that you are still ultimately interfacing with the rest of the world. The rest of the world still moves at a rather leisurely pace. A lot of successful companies really don't start taking off until the third year of business. The rule of thumb is that for the first year, you're usually losing money. By the second year, you're hoping to break even, and by the third, should the business prove to be viable, you start making a profit. Even in the case of technology companies where this does not hold true nearly as much, there should at least be a parallel resemblance to this trajectory. Instead of being profitable in year 3, perhaps a technology startup begins to generate revenue, or is cash flow positive. The key characteristic is that in year 3, some sort of inflection point for success is reached.

If you don't hit this inflection point in year 3, you probably will never hit it. It's safe to say that you gave it your all, and quit the endeavour. If you do hit that inflection point in year 3 though, the proverbial sky is the limit. But in my opinion, it really does take 3 years worth of effort to say that you really put in a concerted effort.

Do you have the resources and will to give it some more effort? My advice to you is not to consider your current startup a failure. Rather, visualize your startup as a swimmer that's trying to cross a lake but has underestimated the direction and flow of the current. So you're a bit off course from where you need to be. The answer is not to give up on where you wanted to go, but instead change your tactics and find another route to your destination. Maybe it's longer, takes a bit more effort, and requires more time.

All the problems I see with Trogger are ones whose solutions are within your ability to solve. To me, Trogger appears to be a Web 2.0 version of Usenet. Except that it does not address any of the the problems that plagued Usenet:

The inability to prevent spammers from ruining the dialogue.

The fact that conversations in Usenet needed to stay on topic so that finding conversations was easy, but in real life conversations seldom do and people enjoy it that way. Reward tangents. People go off on tangents in conversations because they want to remain engaged. They leave conversations when they're unengaged. Why would you want people to leave your conversations?

The short history of the web has shown that protocols don't make much money by themselves. You don't want to be the protocol of conversations on the Internet. Instead, choose a niche and be the conversation for that niche. Look at Stack Overflow as an example. If the Stack Overflow website was simply released as a general discussion platform, I'm pretty sure the thing would have tanked.

If I were in your shoes and I had the resources to survive for a little while longer, here would be my abstract thought process:

1) Reduce the scope of the problem. You know what discussion boards traditionally suck? Healthy living/workout ones. They're all sh*t, but there's a lot of money in that market. Find a market like that and be THE forum for that market, like Stack Overflow is for software devs looking for technical answers.

2) With the scope reduced, take the opportunity to refactor the user experience. Do you still need to integrate with Twitter and Facebook? If not, cut out those features. Cut out everything you possibly can until you've distilled the design down to the useful minimum. Then don't add features until you start seeing your users really hacking the system to their needs, like posting ascii diagrams to try to illustrate a point (e.g., if you did not have an ability to post pictures).

3) The most important part... Everything you do needs to be thought of as costing money or making money. Ideally your strategy involves trying to balance a cost with a revenue generator. For example, simply to host the site will cost you money. Instead of waiting for $1M to fall out of some VC's hands into your lap, start thinking about ways to offset this cost. On the easy end of the spectrum is ad revenue. Implement ads in a way that people are used to and that will begin to make you some money. Then try to grow this revenue. On the other end of the spectrum is trying to find sponsors. This task will be easier if you have narrowed your scope in step 1 and are targeting a specific market. For example, if you decide to become the ultimate discussion place for plastic surgery, Google plastic surgery and find out who's buying up ad words. Find a way to get in contact with them and offer them the ability to sponsor your website for a fee.

Now, whenever you go to implement a feature you can ask yourself the question "Will this feature make my users happy and cause them to use the website more, thus making sponsors happy or make me more ad revenue?" If not, don't implement the feature. If it will just make them happy but won't make them use your website more, don't bother doing it. It's amazing what this distinction can have in making a business a successful one or not.

diN0bot• 17 years ago

re: walking after a year:

this is curious to me. on the one hand, success can spring from numerous failures, the numerous implying fast! imagine the inventor always inventing, multiple projects at once! a new one every week!

on the other hand, success can spring from committment and dedication. stay focused, don't give up.

i'm not refuting your points--in the end, one has to be smart, strategic. go all out in the right way.

mcav• 17 years ago

You're an airplane pilot trying to get your bird off the ground. You have to attain a certain velocity to succeed. If your runway is short, you'd better open the throttle wide -- and if it isn't working, you have to decide pretty quickly to give up and try again.

But if the runway is longer, you have more time: continue building speed until you have enough force to lift off.

You just want to avoid giving up when you had plenty of runway.

9oliYQjP3• 17 years ago

Sure. I suppose what motivated me to write the original post in this thread is that I'm beginning to see a lot of people jump into startups with a great amount of wishful thinking and a complete misconception of what they are getting into. It's really the computer geek equivalent of a jock joining the military after high school because the ads are cool and he enjoys fighting.

I'm not a huge fan of the strategy to keep on trying until you succeed. There are some things in life that I will simply not be good at. No matter how much I try, there is no way I will be an Olympic swimmer. That ship sailed well over half a lifetime ago. Some people just aren't cut out for running a business. Hell, even some successful business people are tormented by the idea that they were simply lucky, and spend the remainder of their time failing at future business endeavours.

All I'm suggesting is that you need to go into a startup with a reasonable sense of commitment. For most businesses, I think a reasonable time frame to dedicate to it is 3 years. There isn't a fixed gestation period for a successful business the way there is for creating a baby. But 3 years is long enough for you to have seen some highs and lows, to have performed several iterative improvements to the product/service, and (again, hopefully) witnessed the market's initial reaction and longer term assessment of the product/service. It's enough to have executed a few strategical paths and many more tactical manoeuvres. In effect, it's long enough to provide an adequate number of data points (for you) to make the decision to continue or not if the market hasn't made that decision for you already.

For those of you wanting to go into a startup, think of being able to put in a 3 year commitment and now let your mind explore that idea vs the idea of simply putting in a year's worth of effort. You'll come up with a vastly different sense of obstacles that you will face (e.g., cash flow is a problem for a 3 year commitment for most people but not so for a 1 year commitment). The problem is, most people discount these obstacles and then face them anyway because they aren't successful within that first year. Their strategies don't take them into account and are rendered ineffective as a result. Basically, treat a startup as if you're emigrating to a foreign country for a few years as opposed to just visiting one for vacation. All the same sort of obstacles still apply.

dhouston• 17 years ago

This is dangerous advice; failing fast is way better than failing slow. To get to (in your example) breakeven in year 2, you better be showing traction in year 1 after launch, or at least signs of life, which they were not. No one liked or cared about what they were building, and they wisely realized they had no idea what market they were really going after and (after several months' worth of learning) still had no evidence one even existed.

Given they're still at square one, if they identified a more promising market, they should go for that, and it takes a lot of discipline to admit that all that prior effort is sunk cost.

scotty79• 17 years ago

Again repetition in short published list. http://news.ycombinator.com/item?id=834697

"Companies succeed with single founders all the time. Just look at Digg, Craigslist, eBay, Netflix, Wordpress, Wikipedia, Amazon, TechMeme, PBWiki, TechCrunch, TechMeme, and Etsy."

Virax• 17 years ago

OK let me tell you something.

You have no idea why your startup failed. It has relatively little to do with the things you listed.

Your startup failed because you named it "trogger".

The name of a product, technology, website, whatever is critical for success. The name "trogger" makes me think of "troglodyte" or "troll blogger". Seriously, this is one of the worst names for anything internet or technology-related that anyone could possibly come up with.

Please please please make sure that someone else chooses the name of the next startup you work on.

ojbyrne3• 17 years ago

"Companies succeed with single founders all the time. Just look at Digg..." Bad example.

12345678• 17 years ago

i'm not sure what to make of my situation. i've been working at my small business for a full 3 years now. i think the internet can make for a really different start to companies now. i had great attention and great sales at the beginning. then a huge lull because i changed the aesthetic and didn't realize how much that would impact my sales. so i changed it back and again sales were good. the the recession hit. and sales have been terrible. i'm still getting items up for this season and will see how that goes. but the area of the market i occupied is not good for anyone right now.

so how do i assess all this? is this a keep going and wait it out thing? am i failing or is it just the market.

i am now finally hurting for cash. i kep my overhead low through all this and was strategic about material costs too. but now that isn't helping.

What I Learned From My Startup Failing

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