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My failed bootstrapped startup: a retrospective.
- swanson 15y agoThese kind of posts always leave me with a mix of inspiration and discouragement. It is awesome to read about someone like you (local developer, similar learning style, beginner entrepreneur) who actually builds something. There is a lot to be proud of for just Doing Something - even if you fail. But at the same time, I feel like I would fall into the same pitfalls that you mentioned. I am not looking forward to doing anything related to setting up an LLC, doing sales calls, etc. I like my job and don't want to quit. I know other developers but end up working on my own stuff alone in most cases. Thanks for sharing Aaron - I'll have to try to make it out to the next Devs With Side Projects meetup.
- rick888 15y agoMost of the time, if your startup is a side-project (IE: you have a full-time job), it won't be successful. Not to say that this is impossible. I've found that when you are working full-time on something, your mind is in a different place. You can also move much faster.
- aaronlerch 15y agoSo very true. I struggled with that decision a lot, but ultimately chose not to. Mostly because of the impact it would've had on our adoption.
- akg_67 15y agoI don't recommend anyone to quit a FT job unless startup is already generating cash flow and need more hours of your time to scale further. My last startup failed because we foolishly quit our jobs prematurely, it created pressure on us to generate income, we had to abandon bootstrapping, forced us to look for outside financing, wasted too much time trying to chase angels and VCs instead of focusing on business, made us quit 12 months before cloud backup (our target) took off. Now, whenever someone tells me that such an such angel asking him to quit job to show commitment to startup, I tell him to tell angel to write a check for $X and then you will leave your job. Don't quit job if someone want to see that as your commitment to the cause.
- rick888 15y agoEither the startup is generating cash or you have enough money in the bank to last you at least a year. A year and a half ago, the company I was working for went out of business and I was let go. I had 3 years of savings and I decided to go full-time with my side projects. It's tough to juggle both because you have to switch your mind from one thing to another. Not only this, but if you are working full-time and working on your company in your free time, you have little time left over to just relax. This caused me to burn out a couple of times a year. Another concern of mine was that the company I was working for would try to claim ownership over my projects if they ever became successful. Even though the code bases were completely different (and so were the industries), I never wanted to take that chance. I suppose I could have just put everything out there and told my former employer what I was working on, but this would have caused lots of problems for me. I'm in a better place now and I've accomplished more in a week than in a month when I was trying to do both. I am also in a good position because I don't have a wife or kids. I realize that not everyone can do this.
- akg_67 15y agoOnly point I wanted to make was that quitting job is not a pre-requisite to having a successful startup, which you were implying. I used to hear that often and naively believed that to my own peril. I discourage others to do the same however amount of saving you may have unless you are at a stage where you never need to work for money.
- rick888 15y ago"Only point I wanted to make was that quitting job is not a pre-requisite to having a successful startup, which you were implying. I used to hear that often and naively believed that to my own peril. I discourage others to do the same however amount of saving you may have unless you are at a stage where you never need to work for money." If you don't have any money in the bank, then you shouldn't quit your job. However, I feel that it's better to quit your job after saving money than toil away for a much longer period of time trying to do both. I suppose it also depends on your startup. If you are trying to start the next zany Twitter or Facebook app or your goal is to just get funding, then yeah, maybe a year of savings won't work...
- bignoggins 15y agoI disagree, it's perfectly possible. My side project started last year and I didn't quit until my revenues matched my salary. Now I'm on course for 250-300K in revenue this year. You just need to scale the startup appropriately. An groupon competitor just is not appropriate for a bootstrapped startup, in my opinion. Whereas something like an iphone game definitely is.
- Ash__V 15y agoSometimes, the best startups start when you are dissatisfied with your present job, have nothing else to lose, but are smart, and have a couple of ideas you think are really awesome and a game changer. Check out this TechCrunch article where one of the cofounders of DoubleClick, Kevin O'Connor talks about the attributes of an entrepreneur: http://techcrunch.com/2011/08/19/founder-stories-kevin-oconnor-good-entrepreneur/ http://techcrunch.com/2011/08/19/founder-stories-kevin-oconn... He lists a few signs of a successful entrepreneur. A desire for control and the ability to challenge authority are near top of the list. A way to detect the second trait? "Have you told your boss to shove it?"
- manuscreationis 15y agoI've been writing a similar tale of my own - with a surprisingly similar name, as a matter of fact. It's never easy to watch something you've poured so much work into fall apart like that, so my condolences on your loss http://lookingbackaretrospective.posterous.com http://lookingbackaretrospective.posterous.com
- TWSS 15y agoI fought against the need to quit my job for over a year while I was working on startups on the side. It took an idea that I was wildly passionate about and a well-timed layoff to make me realize that being "all in" wasn't just a poker metaphor the already-successful used to look down on plebes like me. That said, I'm stupidly well-placed to be working on my own idea, unpaid - I'm using the self-employment assistance program through my state's unemployment department to get UI checks without having to job hunt (I do, however, have to submit business plans and the like). I also have enough in the bank to cushion me when the government cheese runs out.
- mgkimsal 15y agoWhat state are you in?
- TWSS 15y agoOregon. One of only a handful of states with self-employment assistance programs - the others are Delaware, Maine, Maryland, New Jersey, New York, and Pennsylvania, AFAIK.
- dualogy 15y agoThat government cheese "ran out" decades ago in most countries ... but for some reason they keep dishing it out: It's an incredible hack, really: the money you "have in the bank" (you don't have it, you lent it to your bank and they 'owe' it to you) lets them play with some multiple of that amount (10x? 2x? 100x? Don't know the exact figure.) They put that into some bonds or treasuries that creates "government debt" but gives the govt. cash to pay for an "self-employment assistance program" (and countless other "programs" as well as their own "cut"). The only however-unlikely risk? There could be a distant day in the future where both the govt. and the bank fail you at the very same instant without recourse -- of course, we're both hoping that day won't ever come -- but if it does, you will kindly not riot, deal?
- kayhi 15y agoThe long and sometimes lonely path of a start up... apologies as this maybe slightly off topic. I keep seeing stories of start ups that are a huge success, launching or died. Where are all those companies in between? Perhaps it's a combination of not being exciting to report on and founders being busy (both of which could be related to working hard). Anyone know of place for those between launch and dead?
- byoung2 15y agoAnyone know of place for those between launch and dead? In between "I'm shutting down because of lack of traction" and "I just got acquired for $20 million" I know a few people whose startups have become "lifestyle businesses". Though that term seems synonymous with failure on HN, for the people I know, it means being the boss, not having one, working from home (or Hawaii, Thailand, etc. for a few weeks at a time) instead of working in a cubicle. They're making anywhere from $150k to $240k per year, and will likely continue to earn that but not much more because the businesses don't scale easily, but they're doing what they love.
- diolpah 15y agoMy company falls into the category you describe. We're doing well, but not large, sexy, or hipster-approved enough to be covered by the tech/startup press.
- switch 15y agoPlease Note: This might seem critical but I'm just pointing out three problems i.e. lack of effort, lack of measuring effort and other statistics, lack of empathy with customers. My argument would be that without at least 2 of these 3 the OP will keep running into problems and keep blaming extrinsic meaningless things. * Credit to the person (aaron?) for writing this. However, the lack of measured numbers is terrifying. And the disconnect with the customer perspective is just hard to fathom. 1) How much time did you spend on this? Over what period of time? 2) How much traffic did you get? How many people bought coupons? How many people went to other sites from your sites? 3) What amount of money did you spend? On what areas? What amount of money did you make? From what sources? * You say that you didn't listen to your customers. My point would be that you didn't realize that you were making something FOR THEM and not for you. You should consider thinking from your customers' perspective. They really don't care about some of the things that you think are successes i.e. using hosted services and learning Ruby and the site being BEAUTIFUL because you think a site being beautiful is important to you personally. Unless Indianapolis is 99% users of HackerNews. * You say that you were shocked that small business owners don't track things - yet you write this post without giving any figures. Which makes a great post meaningless because we don't know what 'You had no skin in the game' means. Did you spend 40 hours a week after doing your day job? Did you do that for 3 full years? Did you put in $100K of your own savings? * Finally, you went into a space where you had very few competitive advantages - not the first mover, not the best product, not the most money, not the most resources, no brand recognition. If you had tried a niche within coupons or a new area you might well have seen much better results. Also, you don't mention anywhere how much total time and effort you spent on this which makes it difficult to know whether your lessons are worthwhile or not. If you spent 10 hours a week for 6 months - then obviously all your 'learning' is probably useless. If you spent 40 hours a week for 2 years - then it's very valuable stuff. which one is it?
- cjy 15y agoHow is time spent on something in any way correlated with how much he learned? The whole idea of failing fast is that you don't need to invest pointless time after you have learned something is not going to work.
- chexton 15y agoI think starting anything in the coupon space is difficult as it's not about the technology, it's about the sales. Groupon has an extremely simple website...it is merely a platform to display the deals: their success is essentially totally driven by the massive sales force they have at work them. I think that technology in this space will play a greater role in the future (mobile, targeting, etc.) but for now the winners are those who sign up the most businesses and the most consumers. I don't think the author should give up on startups entirely; it sounds like they have indeed learnt some skills and can apply those to any number of future projects. At least they have worked out this space is not for them!
- aaronlerch 15y agoDon't worry, I haven't given up. :) Well, I haven't given up for good... in the short term, I just can't swing work+fam+startup. For now I'll just keep working on side projects and see if any of them make any headway. ;)
- pkamb 15y ago"As a new player in the space we couldn’t offer huge traffic or guaranteed results. So we had to give it away for free." How were you making money?
- biot 15y agoVolume. :)
- aaronlerch 15y agoI wasn't, unfortunately. This was self-funded. The idea was to give it away for a period of time ("3 months free! Buy today, pay later!!!!1! OMG!!") in order to crack the chicken-and-egg problem of content vs visitors.
- pkamb 15y agoIt's the "we had to give it a way for free" part that you should rethink. People like us are way to quick to price low/free because that's what we'd pay for the service. Not at all what your target customers are willing to pay however. "Double your price": http://news.ycombinator.com/item?id=1639712 http://news.ycombinator.com/item?id=1639712
- DavidTO1 15y agoI really enjoyed reading your story. I had similar experiences with my side project as well. In my case, I tried to take on the behemoth that is Intuit. I spent 2 years working on the same side project. In my third year, I decided to quit my job and focus on it fulltime. Six months into working on my startup I realized that I made the mistake of trying to pick a fight with Intuit since the product that I was building was too much for me to handle. I decided to switch course and focus on niche products for the Mac App Store. Two months after my pivot, I was making a few thousand a month from my apps. I've since accepted fulltime employment and am continuing to work on my Mac Apps as they are still generating the same amount of money. From this experience I learned its best to focus on a niche market if you are a one man band. I think your failure was because your focus was too wide. Perhaps for your next project, you should consider focusing on a niche market. Good luck.
- Luyt 15y agoHe writes: "I dropped MongoDB in favor of using a relational database" I wonder what made him abandon a perfectly good datastore in favor of a SQL thing, because everybody knows that http://www.mongodb-is-web-scale.com/ http://www.mongodb-is-web-scale.com/ ;-)
- aaronlerch 15y agoLol, love that vid. :) Actually I happened to have gone down the same road as Rob Conery: http://wekeroad.com/building-things/tekpub-a-six-pack-and-you http://wekeroad.com/building-things/tekpub-a-six-pack-and-yo... Except in my case, since I was learning as I went, I didn't have time to figure out why the less-mature technologies weren't working just right. Or I'd look at a problem and see it solved nicely for relational DBs, but still needing some manual work to make it work with a NoSQL DB... and when it came down to actually getting stuff done, I hated writing code I didn't have to write. That's actually an interesting thought: if you're trying to learn a technology, doing a startup is the wrong thing to do. Because ultimately you are just wasting precious time on things that the business side doesn't care about. I hit that "conflict of interest" quite a bit through this process.
- Luyt 15y agoIn my new sideproject I'm using MongoDB for the first time in my life. It works well and I haven't run into any obstacles yet; however, the data model for this webapp is trivially simple.
- kariatx 15y agoMy story is just like your story except that each time something didn't work, I took a few days or weeks off and then tried another site. And another. And another. It took dozens of ideas until I found a business that worked for me. Take the lessons you learned and start again. Sooner rather than later. You'll probably fail again too, but eventually you'll stumble upon something that clicks. The key is refusing to give up. Perseverance is much more important than any idea, programming language, or system of doing things. People who get it all right on the first or second try aren't skilled entrepreneurs. They're just lucky.
- llch 15y agoYour product needs two sides of customers: merchants want to reach more consumers and consumers want to get good deals. Breaking this chicken and egg issue creatively is probably the single most important thing you needed to do.
- nivertech 15y agoIf all you building a Grouppon clone - then technology is the easy part.
- cHalgan 15y agoI'm sorry, but I don't think you can say that "startup failed" if you haven't even quit your day job and focus 100% on your startup. Maybe you can say that investigation/discovery phase didn't yield desirable results.
- ivix 15y agoLooks like he made the two classic mistake of a software guy with a startup (i made them too) 1. Spend too much time futzing about with the technology. No one cares. 2. Spend too much time futzing around with stuff you think a business needs to be a 'real' business.
- fens 15y agoBest of luck on your next startup. I honestly think that in the end you just had to ask yourself if you were willing to spend the next 10 years of your life working on Beautiful Savings. If your answer is "no" then obviously, pouring more time and effort into that startup seems painful. There's no point iterating continuously on a solution for a problem that you're not dedicated to solving. I think though once you find that idea that you're genuinely excited and passionate about, you'll find that failure only occurs when you decide to stop iterating. If a person has a solid idea and solid execution, I find it hard to believe that the end result will be graded an "F", more likely it'll be a C or D, unless you are very very unlucky. The idea is the that the next iterations bring it to an A or B.