10 ms·

We shut down our startup

138 points by hunvreus 10y ago

mkhait 10y ago
good read
alexfishman 10y ago
Thanks for sharing
chlestakoff 10y ago
It would be really interesting to see long-term stats on success rates of founders who pivoted vs those who persevered with the original idea.
- alexfishman 10y ago
  indeed
- konradb 10y ago
  I can't figure out what this would tell you. Would it tell you that initial ideas were often better or worse than subsequent ideas? The sensitivity of teams to how product market fit occurred? I can't figure out how it would be actionable, due to the wide gamut of ideas and execution.
thebladerunner 10y ago
Hacker news folks are just suckers for these stories
- rsspbrry 10y ago
  It's the 'knowledge gap' trick. Create a bit of mystery - a mental itch if you want to call it that - and readers start drooling like Pavlov's dogs. The writing is good though, so I didn't mind.
- a_small_island 10y ago
  It was a fine read. Entertainment over substance.
parsnips 10y ago
>Here’s our big insight / little secret — selling to restaurants is a dead end. But fantastic if you can make it work a la Grubhub and Seamless who got $360 million in revenues primarily by selling to restaurants. The restaurant business is indeed hard, but lucky (or good) sales people have had tremendous success and profitability tackling it.
- hkmurakami 10y ago
  I think the key difference is that Grubhub and Seamless offer restaurants an additional revenue stream without the overhead or operational headaches of doing in themselves.
  - parsnips 10y ago
    SinglePlatform did _exactly_ what this business did (centralized menu mgmt), but was profitable and sold for $100million.
    - xivzgrev 10y ago
      "SinglePlatform is your connection to the top search engines, travel and review sites, online listing directories and mobile apps used by over 200 million people to find local businesses." (from website) Sounds more like digital facing store front management, way beyond centralized menu management, which would be a clear value add for local restauraunts.
      - robbiemitchell 10y ago
        Isn't that Locu?
- draw_down 10y ago
  I don't think those are quite the same thing, they are still ultimately consumer businesses. The end customer is the public, not restaurant owners
jacquesm 10y ago
I'm missing the bit where there was a word of appreciation for the paying customers and I suspect that they didn't rate a mention is a factor in why this company was unsuccessful.
- rpgmaker 10y ago
  He also kind of shittalked his cofounder. Implicit in the setup of the piece is the fact that his cofounder was essentially clueless about everything. "I asked my close friend of 20 years how he was doing. Dmitry answered, “Awesome! I love what we’re doing these days!” ... It was obvious that my most sarcastic friend genuinely meant every word. Little did we know then, that Dishero, the company we had co-founded a year and a half ago, would be shut down within the next 72 hours as a direct result of his answer."
empressplay 10y ago
> we were burning $100K/m and making $9K/m in revenue There's all that needed to be said, right there.
- joemi 10y ago
  I like how he specifically called that "mediocre success"...
  - antisthenes 10y ago
    Even worse, he contrasted "mediocre success" against "failure", whereas anyone outside of the tech bubble would have looked at the numbers and rightly called it a failure outright. The bubble is not in valuations, the bubble is in people's heads - the naive delusion that you can disrupt all aspects of human nature by applying enough technology and holistic ideology.
    - jrs235 10y ago
      >the naive delusion that you can disrupt all aspects of human nature by applying enough technology This. Absolutely this. Superior software/technology has, is, and will lose to crappy stuff from time to time. And here is why... psychology trumps technology. If your technology doesn't align well with psychology then you have an enormous uphill climb to conquer. If your solution requires people to fight their nature, best of luck to you.
    - onion2k 10y ago
      The bubble is not in valuations, the bubble is in people's heads - the naive delusion that you can disrupt all aspects of human nature by applying enough technology and holistic ideology. It may be true that there are aspects of human nature that can't be disrupted by technology, but the problem is recognising which can and which can't. Often when something fails you don't actually know because it may succeed under slightly different circumstances. The failure of a startup is evidence that there may not be a market for "disrupting human nature" in that domain, but it definitely isn't proof.
  - 10y ago
cityzen 10y ago
"the goal to replace the paper menus and give restaurants full control over their online presence." "Our business was seemingly working and from 30K feet — it looked great:" "We had had happy customers and revenue almost from day one. Our revenue grew continuously for 11 months in a row." "Despite of all of the above, Dishero was still in a mediocre category: we were burning $100K/m and making $9K/m in revenue. The revenue continued to grow, but the growth was painfully slow and unpredictable." We're not in a bubble....
- dohertyjf 10y ago
  Right! I'm sorry, but $9k/mo in revenue with 45 sales people and $100k in expenses?? Definitely not in a bubble. I run my own bootstrapped company that does $5k/mo recurring and my expenses are sub $750 a month.
  - jbbarth 10y ago
    The article doesn't mention "45 sales people" for Dishero, but for the previous company of their "VP of sales". Curious about the number for Dishero tho.
  - powera 10y ago
    If you have no employees and don't consider your own salary an expense, you're not comparable as a business.
draw_down 10y ago
Yeah, don't try to sell to restaurants. I'm not sure if that, or running a restaurant, is the worse idea.
- danieltillett 10y ago
  Worse to sell to a restaurant since if you have a chance of success if you are running a restaurant. There whole SMB market is a death trap for technology companies. It looks so attractive on the surface; great demand and no competition, but the reason there is no competition is the cost of acquiring a customer in this market is greater than the lifetime customer value.
  - thebladerunner 10y ago
    Square seems to be doing not too shabbily in that market.
    - ams6110 10y ago
      That's because they hit squarely (no pun intended) on a pain point with a clearly better solution.
  - mahyarm 10y ago
    So how does slack, square and shopify do it with their SMB products?
    - vacri 10y ago
      'traps' don't necessarily have a 100% capture rate.
      - danieltillett 10y ago
        Exactly. People see the few companies that manage to succeed in this market and assume it is easier than it really is - the few survivors hide the thousands of companies that tried and failed.
ilyaeck 10y ago
Very good read, but at the end, there is no universal recipe for either success or failure.
cwilkes 10y ago
They went from a company trying to sell to restaurants to one that will sell to developers? Developers are some of the cheapest people I know. Many refuse to even pay for tools that save them a lot of hours per month (i.e. PyCharm). They don't know how to value their own time. So unless they start targeting the C level management this product is probably doomed.
- the_watcher 10y ago
  Developers are cheap in that they won't pay for something themselves if they have a remotely functional workaround. Development teams, however, are much less frugal about spending their employer's money to save them time and pain, and it's pretty easy to get management to sign off on purchasing something that will save their developers time, pain, or just plain make them happier.
  - JetSpiegel 10y ago
    > and it's pretty easy to get management to sign off on purchasing something Whooa, where is this mythical land of milk and honey, and can I but tickets to get there?
    - rhizome 10y ago
      Do you work someplace that won't pay for Photoshop or even SublimeText (et al)?
      - hudell 10y ago
        I worked in companies that would try to avoid paying for those and companies that would never pay for those no matter what.
        infinite8s 10y ago
        How successful were those companies?
        10y ago
throwaway5752 10y ago
Every time I read one of these (less and less frequently) I find that the core problem is the management writing the article. None of the insights they talk about are particularly noteworthy or trade secrets. They could have been discovered as part of coming up with their business plan. It's more than fair to assume they'll make the mistake again.
- thebladerunner 10y ago
  Why so negative?
  - tmat 10y ago
    because this is HN... it's a circle jerk of people who think their shit don't stink.
    - zarriak 10y ago
      I mean I don't think they ever literally did any testing on the usage of their website. They have some nice settings for using their website, but they don't have a landing page for it so they allow you to have lots of great functionality in searching for food, it is about useless. Not only do they not show them at the start, they also have absurd and odd defaults on the ones that would be most generally useful at the start For example: The distance setting starts at infinite distance instead of the 5, 10, or 15 increments they have. This would be a great app if they just had you go through the settings each time you started using it, as they have lots of details, like times, ambience, payments, and whether alcohol is served. They could even expand this to if you logged in they could list the settings you used previously or you could save some as presets for going out with friends or something like that. It is clear that it had potetntial, but I think they didn't have a clear idea of the service they wanted to provide at the start and got too bogged down in both the implementation and problems to recognize the things that made them want to do it in the first place, along with the investors that liked it. But ok fam
    - dang 10y ago
      Please don't react to someone making HN worse by making HN even worse yourself.
seibelj 10y ago
There are many options for mobile app debugging / analytics already, I feel like these founders just want to start something... anything... Maybe it's time to take some time off and reflect? I've never started a company so I don't know these things, but it seems like a desperate move to me.
- melvinmt 10y ago
  > I feel like these founders just want to start something... anything... Wantrepreneurship... I've been there too. Taking some time off is definitely the best cure but $1.8M in the bank is very tempting to keep diving into anything as long as you can keep deluding yourself you're working on the next big thing.
  - ams6110 10y ago
    I don't understand why the investors would not take the $1.8M back once the idea they invested in was shut down.
    - brianwawok 10y ago
      I guess they value the founder more than the money? Their lottery ticket already failed, this is a pure free bonus round.
    - gumby 10y ago
      You know that standard VC advertising line "we invest in the team"? It's not always bullshit. And if you've already seen the team in action and like how they make decisions you're better off effectively giving a known quantity a new $1.8M investment (with zero transaction cost) than taking a flyer on not only a new business idea but a new team as well.
NaOH 10y ago
I’ve worked in the food industry for about 20 years now. For the last 3+ years my business has done nothing but sell to restaurants. I sell them food. Perishable food with a short shelf life. The most common responses to our products by people who have eaten them are. “I love them” and “That’s the best I’ve ever had.” On average, my customers resell my products for about 2.5 times what they pay me. Depending on the customer, my products requires anywhere from no labor to 20 seconds of labor from restaurant staff. The business was profitable its first month and has shown year-over-year growth every year in both product sales and revenue. Everything is done by myself and one other person (who joined after two years). We’ve spent $40 on marketing from that time I had business cards printed. We have higher per-month revenue than Dishero and there’s never been a monthly loss. As food industry people, we use our understanding of the food environment to help our customers. We know the awfulness that is restaurant life and we accommodate our customers’ needs using what we know, what customers tell us, and what we see that isn’t stated. Probably my favorite action is when I show up delivering what my customer has ordered, only to cancel the order because I know the customer does not need the items. These are not products I can simply sell some other day. When that happens—and it always does—my customers know our focus is taking care of them, not making every possible sale. In short: We have relationships with customers, and relationships are always give-and-take arrangements. I’ve found that focusing on the giving ensures we make enough to keep giving. All those self-congratulatory things said, I have no doubt that our success thus far can be attributed to customer service. No, that’s not saying anything novel, but—as always—it requires listening, watching, adaptability, frustration, flexibility, and a host of other behaviors/actions. It’s hard work and it’s not easy to get out of my own head to get inside someone else’s head. The economic and non-economic results have been good. We haven’t lost any customers. The majority of our customers have found ways to get more products from us. All new business has come from word of mouth. But I don’t think there’s anything novel in what we’ve done. I say that because I believe the success of every business come down to three factors: cash flow, logistics, and people skills. I don’t know of an instance in any industry where a great product overcame deficiency in those areas. I was unfamiliar with Dishero prior to this piece. From what was shared, it’s hard to see if they did well with logistics or people skills (the author says they missed on cash flow). The author noted they had trouble overcoming the logistics of interacting with restaurant staff. If so, it’s difficult then to build relationships, so there goes people skills. It certainly sounds, though, like the people behind Dishero had some good product-making skills. And I have nothing but respect for the decision to cut their losses. I can’t imagine the difficulty of that choice, and the accompanying pain, despite the apparent wisdom of that decision. My best to those people in their next pursuits.
univalent 10y ago
Shouldn't there be a lower cost way to figure out WTP, CAC, churn rate, customer purchase journey map, etc. etc. before starting a company and having a large-ish sales/marketing team?
deleted 10y ago
[deleted]
the_rosentotter 10y ago
> selling to restaurants is a dead end. I can expand on that: Selling to small-to-medium-enterprises is a dead end. They are entirely focused on the near-term, and usually their finances are hand-to-mouth each month. Unless you can demonstrate that they will be making real, actual money with your product from day one, without any extra effort, save yourself the bother.
- shostack 10y ago
  Can you expand on your experiences, and why you think they are a trend?
smaili 10y ago
A lot of what's said is very similar in the education space as well so I can somewhat understand. Great writeup!
ageofwant 10y ago
The core take away here is that unless you are one of the top 3 employees in a start-up, or even moderately successful business, you are trivially expendable. No matter if you put in hours of overtime, poured your hart and soul into your job, all of that is null and void on the whim of the owners. Of course they will have a rational justification why you lost your job. Unless you control your destiny you will forever be subject to the destiny of others. Take all of this into consideration when next interviewing and negotiate for the best possible deal, knowing that no amount of possible "future" prospects is a solid as hard cash in the bank now, be as predatory and hard nosed as you can possibly be. You are working for Me(Inc) and its dependants, you are morally obliged to extract every last drop of value you can from your current employment relationship, because, as you can see from this example, the converse is a given.
- ams6110 10y ago
  No matter if you put in hours of overtime, poured your hart and soul into your job, all of that is null and void on the whim of the owners. Well presumably you got paid. I'm not sure what else an employee has a right to expect beyond that.
pbreit 10y ago
If they don't want to work on a restaurant service, that's fine. But I'm not sure their learnings are spot-on. Looks to me like the raised a lot of money which wouldn't be a problem unless they started over-spending (which they did; 17 people & 3 countries???). For an offering like that, get out of SF and find a "small" city like Des Moines or Tallahassee that has 1,000 restaurants but not a million Silicon Valley sales bros calling them every 5 minutes. Prove the business with a lean team before opening up the purse strings.
- jacquesm 10y ago
  > sales bros Can we please get rid of the word 'bros'? It's quite annoying.
  - beerbajay 10y ago
    Do you have a better term for young, white, arrogant, entitled young men?
    - MikeNomad 10y ago
      Yes, but it would violate HN policy/use guidelines...
BuckRogers 10y ago
Another one of these posts? When will they end. "We shut down our startup" Thanks for letting us know.
- mads 10y ago
  I thought it was pretty interesting. Also the related comments here.
kinai 10y ago
"We had raised a total of $2.8M (2 rounds)" "we were burning $100K/m and making $9K/m in revenue" That is how startups in America work: a) take any idea b) find enough believers c) throw money at the problem until it either works out or fails. I mean are those people for real? It's like watching 5y olds playing monopoly How about: If you need millions investment for your idea then your idea is just BAD (except you are building Teslas maybe)
- etjossem 10y ago
  Agreed. I don't look at this and think "mediocre success", as they described it. I see failure.
- ilyaeck 10y ago
  They didn't throw "millions" at the idea. If you read the article carefully, they stopped after spending $1M, i.e., with 2/3 of their investors' money still in the bank. Yes, maybe they could've stopped/pivoted sooner, but once you are experimenting with something, you need to be patient enough to give it a shot. And it looks like the investors opted for sticking with the team for their next shot as opposed to taking that money back - an option that was on the table. That's an indicator of trust, so maybe the team isn't that clueless after all.
- busterarm 10y ago
  I don't necessarily agree. Some businesses simply can't be started without a ton of cash (like building cars like you mentioned). I don't think you could bootstrap a new supermarket concept. Sometimes you just have to get investors to try out an idea.
  - kinai 10y ago
    Yea but they were not building Teslas, they were doing some app/site for restaurants... I wonder what they spend 100k a month on.
    - Hydraulix989 10y ago
thebladerunner 10y ago
Gotta love hacker news: I think I just lost half my karma points near me for asking a question, suggesting that maybe, just maybe we shouldn't rush to judge people so negatively. Haters gonna hate...
- dang 10y ago
  Please don't violate the HN guidelines by going on about downvotes (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html). I agree with you that the comment you replied to was unduly negative. It was probably unfair to downvote yours, though it wasn't particularly substantive. We detached this comment from https://news.ycombinator.com/item?id=11926020 https://news.ycombinator.com/item?id=11926020 and marked it off-topic.
pedalpete 10y ago
Interestingly, I found this post to be full of answers and opportunities in the restaurant space. -> "replace the paper menus and give restaurants full control over their online presence" This isn't a task of selling to a restaurant. Restaurants don't make their own menus, they go to designers. Designers are the customer for new paper menus. They are currently being threatened by Canva, which is making it easier for non-designers to get a better product. ->"[restaurant owner] doesn’t have a spreadsheet estimating how many people show up on a Tuesday night" Uh, HUGE opportunity. Machine learning across what is going on in a city and how that would affect restuarant sales. Network effects (if you're getting data as well as selling answers) and you get to sell the same product again and again and again. I'm maybe not so sure they were looking at the opportunities enough.
ggggtez 10y ago
How is spending 100k/m, while only bringing in 9k/m is a "moderate success"? Their lessons learned is basically "tech startups in the restaurant space is a stupid idea"!
hrkdndkd 10y ago
What exactly did Dishero do? I don't understand from the article.
Rezo 10y ago
Restaurants have terrible margins (in the 3% range [1]) and high failure rates themselves. Selling to them as a startup is like playing on ultrahard mode difficulty, unless you're solving a hair-on-fire level pain point. The total neglect most restaurants show towards their websites and menus would indicate it's actually not a very high priority problem. Startups are already hard just by themselves. If you want to increase your chances, pick a industry with healthy margins. [1] http://smallbusiness.chron.com/average-profit-margin-restaurant-13477.html http://smallbusiness.chron.com/average-profit-margin-restaur...
ultim8k 10y ago
IMHO the wrong thing about most startups (no offence), is that they all want to change the world. Everyone wants to redefine an existing market as that all previous guys who tried to do it were idiots or didn't know a thing about what they were doing. It's not a bad thing to be ambitious but don't think you are the only special in the universe.
- rpgmaker 10y ago
  I agree. I mean, Dishero was very young. I doubt that in a market as conservative as the one they were in they'd find the magic bullet in less than two years.
deleted 10y ago
[deleted]

138 points by hunvreus 10y ago

mkhait 10y ago

good read

alexfishman 10y ago

Thanks for sharing

chlestakoff 10y ago

It would be really interesting to see long-term stats on success rates of founders who pivoted vs those who persevered with the original idea.

alexfishman 10y ago
indeed
konradb 10y ago
I can't figure out what this would tell you. Would it tell you that initial ideas were often better or worse than subsequent ideas? The sensitivity of teams to how product market fit occurred? I can't figure out how it would be actionable, due to the wide gamut of ideas and execution.

thebladerunner 10y ago

Hacker news folks are just suckers for these stories

rsspbrry 10y ago
It's the 'knowledge gap' trick. Create a bit of mystery - a mental itch if you want to call it that - and readers start drooling like Pavlov's dogs. The writing is good though, so I didn't mind.
a_small_island 10y ago
It was a fine read. Entertainment over substance.

parsnips 10y ago

>Here’s our big insight / little secret — selling to restaurants is a dead end. But fantastic if you can make it work a la Grubhub and Seamless who got $360 million in revenues primarily by selling to restaurants. The restaurant business is indeed hard, but lucky (or good) sales people have had tremendous success and profitability tackling it.

hkmurakami 10y ago
I think the key difference is that Grubhub and Seamless offer restaurants an additional revenue stream without the overhead or operational headaches of doing in themselves.
- parsnips 10y ago
  SinglePlatform did _exactly_ what this business did (centralized menu mgmt), but was profitable and sold for $100million.
  - xivzgrev 10y ago
    "SinglePlatform is your connection to the top search engines, travel and review sites, online listing directories and mobile apps used by over 200 million people to find local businesses." (from website) Sounds more like digital facing store front management, way beyond centralized menu management, which would be a clear value add for local restauraunts.
    - robbiemitchell 10y ago
      Isn't that Locu?
draw_down 10y ago
I don't think those are quite the same thing, they are still ultimately consumer businesses. The end customer is the public, not restaurant owners

jacquesm 10y ago

I'm missing the bit where there was a word of appreciation for the paying customers and I suspect that they didn't rate a mention is a factor in why this company was unsuccessful.

rpgmaker 10y ago
He also kind of shittalked his cofounder. Implicit in the setup of the piece is the fact that his cofounder was essentially clueless about everything. "I asked my close friend of 20 years how he was doing. Dmitry answered, “Awesome! I love what we’re doing these days!” ... It was obvious that my most sarcastic friend genuinely meant every word. Little did we know then, that Dishero, the company we had co-founded a year and a half ago, would be shut down within the next 72 hours as a direct result of his answer."

empressplay 10y ago

> we were burning $100K/m and making $9K/m in revenue There's all that needed to be said, right there.

joemi 10y ago
I like how he specifically called that "mediocre success"...
- antisthenes 10y ago
  Even worse, he contrasted "mediocre success" against "failure", whereas anyone outside of the tech bubble would have looked at the numbers and rightly called it a failure outright. The bubble is not in valuations, the bubble is in people's heads - the naive delusion that you can disrupt all aspects of human nature by applying enough technology and holistic ideology.
  - jrs235 10y ago
    >the naive delusion that you can disrupt all aspects of human nature by applying enough technology This. Absolutely this. Superior software/technology has, is, and will lose to crappy stuff from time to time. And here is why... psychology trumps technology. If your technology doesn't align well with psychology then you have an enormous uphill climb to conquer. If your solution requires people to fight their nature, best of luck to you.
  - onion2k 10y ago
    The bubble is not in valuations, the bubble is in people's heads - the naive delusion that you can disrupt all aspects of human nature by applying enough technology and holistic ideology. It may be true that there are aspects of human nature that can't be disrupted by technology, but the problem is recognising which can and which can't. Often when something fails you don't actually know because it may succeed under slightly different circumstances. The failure of a startup is evidence that there may not be a market for "disrupting human nature" in that domain, but it definitely isn't proof.
- 10y ago

cityzen 10y ago

"the goal to replace the paper menus and give restaurants full control over their online presence." "Our business was seemingly working and from 30K feet — it looked great:" "We had had happy customers and revenue almost from day one. Our revenue grew continuously for 11 months in a row." "Despite of all of the above, Dishero was still in a mediocre category: we were burning $100K/m and making $9K/m in revenue. The revenue continued to grow, but the growth was painfully slow and unpredictable." We're not in a bubble....

dohertyjf 10y ago
Right! I'm sorry, but $9k/mo in revenue with 45 sales people and $100k in expenses?? Definitely not in a bubble. I run my own bootstrapped company that does $5k/mo recurring and my expenses are sub $750 a month.
- jbbarth 10y ago
  The article doesn't mention "45 sales people" for Dishero, but for the previous company of their "VP of sales". Curious about the number for Dishero tho.
- powera 10y ago
  If you have no employees and don't consider your own salary an expense, you're not comparable as a business.

draw_down 10y ago

Yeah, don't try to sell to restaurants. I'm not sure if that, or running a restaurant, is the worse idea.

danieltillett 10y ago
Worse to sell to a restaurant since if you have a chance of success if you are running a restaurant. There whole SMB market is a death trap for technology companies. It looks so attractive on the surface; great demand and no competition, but the reason there is no competition is the cost of acquiring a customer in this market is greater than the lifetime customer value.
- thebladerunner 10y ago
  Square seems to be doing not too shabbily in that market.
  - ams6110 10y ago
    That's because they hit squarely (no pun intended) on a pain point with a clearly better solution.
- mahyarm 10y ago
  So how does slack, square and shopify do it with their SMB products?
  - vacri 10y ago
    'traps' don't necessarily have a 100% capture rate.
    - danieltillett 10y ago
      Exactly. People see the few companies that manage to succeed in this market and assume it is easier than it really is - the few survivors hide the thousands of companies that tried and failed.

ilyaeck 10y ago

Very good read, but at the end, there is no universal recipe for either success or failure.

cwilkes 10y ago

They went from a company trying to sell to restaurants to one that will sell to developers? Developers are some of the cheapest people I know. Many refuse to even pay for tools that save them a lot of hours per month (i.e. PyCharm). They don't know how to value their own time. So unless they start targeting the C level management this product is probably doomed.

the_watcher 10y ago
Developers are cheap in that they won't pay for something themselves if they have a remotely functional workaround. Development teams, however, are much less frugal about spending their employer's money to save them time and pain, and it's pretty easy to get management to sign off on purchasing something that will save their developers time, pain, or just plain make them happier.
- JetSpiegel 10y ago
  > and it's pretty easy to get management to sign off on purchasing something Whooa, where is this mythical land of milk and honey, and can I but tickets to get there?
  - rhizome 10y ago
    Do you work someplace that won't pay for Photoshop or even SublimeText (et al)?
    - hudell 10y ago
      I worked in companies that would try to avoid paying for those and companies that would never pay for those no matter what.
      - infinite8s 10y ago
        How successful were those companies?
      - 10y ago

throwaway5752 10y ago

Every time I read one of these (less and less frequently) I find that the core problem is the management writing the article. None of the insights they talk about are particularly noteworthy or trade secrets. They could have been discovered as part of coming up with their business plan. It's more than fair to assume they'll make the mistake again.

thebladerunner 10y ago
Why so negative?
- tmat 10y ago
  because this is HN... it's a circle jerk of people who think their shit don't stink.
  - zarriak 10y ago
    I mean I don't think they ever literally did any testing on the usage of their website. They have some nice settings for using their website, but they don't have a landing page for it so they allow you to have lots of great functionality in searching for food, it is about useless. Not only do they not show them at the start, they also have absurd and odd defaults on the ones that would be most generally useful at the start For example: The distance setting starts at infinite distance instead of the 5, 10, or 15 increments they have. This would be a great app if they just had you go through the settings each time you started using it, as they have lots of details, like times, ambience, payments, and whether alcohol is served. They could even expand this to if you logged in they could list the settings you used previously or you could save some as presets for going out with friends or something like that. It is clear that it had potetntial, but I think they didn't have a clear idea of the service they wanted to provide at the start and got too bogged down in both the implementation and problems to recognize the things that made them want to do it in the first place, along with the investors that liked it. But ok fam
  - dang 10y ago
    Please don't react to someone making HN worse by making HN even worse yourself.

seibelj 10y ago

There are many options for mobile app debugging / analytics already, I feel like these founders just want to start something... anything... Maybe it's time to take some time off and reflect? I've never started a company so I don't know these things, but it seems like a desperate move to me.

melvinmt 10y ago
> I feel like these founders just want to start something... anything... Wantrepreneurship... I've been there too. Taking some time off is definitely the best cure but $1.8M in the bank is very tempting to keep diving into anything as long as you can keep deluding yourself you're working on the next big thing.
- ams6110 10y ago
  I don't understand why the investors would not take the $1.8M back once the idea they invested in was shut down.
  - brianwawok 10y ago
    I guess they value the founder more than the money? Their lottery ticket already failed, this is a pure free bonus round.
  - gumby 10y ago
    You know that standard VC advertising line "we invest in the team"? It's not always bullshit. And if you've already seen the team in action and like how they make decisions you're better off effectively giving a known quantity a new $1.8M investment (with zero transaction cost) than taking a flyer on not only a new business idea but a new team as well.

NaOH 10y ago

I’ve worked in the food industry for about 20 years now. For the last 3+ years my business has done nothing but sell to restaurants. I sell them food. Perishable food with a short shelf life. The most common responses to our products by people who have eaten them are. “I love them” and “That’s the best I’ve ever had.” On average, my customers resell my products for about 2.5 times what they pay me. Depending on the customer, my products requires anywhere from no labor to 20 seconds of labor from restaurant staff. The business was profitable its first month and has shown year-over-year growth every year in both product sales and revenue. Everything is done by myself and one other person (who joined after two years). We’ve spent $40 on marketing from that time I had business cards printed. We have higher per-month revenue than Dishero and there’s never been a monthly loss. As food industry people, we use our understanding of the food environment to help our customers. We know the awfulness that is restaurant life and we accommodate our customers’ needs using what we know, what customers tell us, and what we see that isn’t stated. Probably my favorite action is when I show up delivering what my customer has ordered, only to cancel the order because I know the customer does not need the items. These are not products I can simply sell some other day. When that happens—and it always does—my customers know our focus is taking care of them, not making every possible sale. In short: We have relationships with customers, and relationships are always give-and-take arrangements. I’ve found that focusing on the giving ensures we make enough to keep giving. All those self-congratulatory things said, I have no doubt that our success thus far can be attributed to customer service. No, that’s not saying anything novel, but—as always—it requires listening, watching, adaptability, frustration, flexibility, and a host of other behaviors/actions. It’s hard work and it’s not easy to get out of my own head to get inside someone else’s head. The economic and non-economic results have been good. We haven’t lost any customers. The majority of our customers have found ways to get more products from us. All new business has come from word of mouth. But I don’t think there’s anything novel in what we’ve done. I say that because I believe the success of every business come down to three factors: cash flow, logistics, and people skills. I don’t know of an instance in any industry where a great product overcame deficiency in those areas. I was unfamiliar with Dishero prior to this piece. From what was shared, it’s hard to see if they did well with logistics or people skills (the author says they missed on cash flow). The author noted they had trouble overcoming the logistics of interacting with restaurant staff. If so, it’s difficult then to build relationships, so there goes people skills. It certainly sounds, though, like the people behind Dishero had some good product-making skills. And I have nothing but respect for the decision to cut their losses. I can’t imagine the difficulty of that choice, and the accompanying pain, despite the apparent wisdom of that decision. My best to those people in their next pursuits.

univalent 10y ago

Shouldn't there be a lower cost way to figure out WTP, CAC, churn rate, customer purchase journey map, etc. etc. before starting a company and having a large-ish sales/marketing team?

deleted 10y ago

[deleted]

the_rosentotter 10y ago

> selling to restaurants is a dead end. I can expand on that: Selling to small-to-medium-enterprises is a dead end. They are entirely focused on the near-term, and usually their finances are hand-to-mouth each month. Unless you can demonstrate that they will be making real, actual money with your product from day one, without any extra effort, save yourself the bother.

shostack 10y ago
Can you expand on your experiences, and why you think they are a trend?

smaili 10y ago

A lot of what's said is very similar in the education space as well so I can somewhat understand. Great writeup!

ageofwant 10y ago

The core take away here is that unless you are one of the top 3 employees in a start-up, or even moderately successful business, you are trivially expendable. No matter if you put in hours of overtime, poured your hart and soul into your job, all of that is null and void on the whim of the owners. Of course they will have a rational justification why you lost your job. Unless you control your destiny you will forever be subject to the destiny of others. Take all of this into consideration when next interviewing and negotiate for the best possible deal, knowing that no amount of possible "future" prospects is a solid as hard cash in the bank now, be as predatory and hard nosed as you can possibly be. You are working for Me(Inc) and its dependants, you are morally obliged to extract every last drop of value you can from your current employment relationship, because, as you can see from this example, the converse is a given.

ams6110 10y ago
No matter if you put in hours of overtime, poured your hart and soul into your job, all of that is null and void on the whim of the owners. Well presumably you got paid. I'm not sure what else an employee has a right to expect beyond that.

pbreit 10y ago

If they don't want to work on a restaurant service, that's fine. But I'm not sure their learnings are spot-on. Looks to me like the raised a lot of money which wouldn't be a problem unless they started over-spending (which they did; 17 people & 3 countries???). For an offering like that, get out of SF and find a "small" city like Des Moines or Tallahassee that has 1,000 restaurants but not a million Silicon Valley sales bros calling them every 5 minutes. Prove the business with a lean team before opening up the purse strings.

jacquesm 10y ago
> sales bros Can we please get rid of the word 'bros'? It's quite annoying.
- beerbajay 10y ago
  Do you have a better term for young, white, arrogant, entitled young men?
  - MikeNomad 10y ago
    Yes, but it would violate HN policy/use guidelines...

BuckRogers 10y ago

Another one of these posts? When will they end. "We shut down our startup" Thanks for letting us know.

mads 10y ago
I thought it was pretty interesting. Also the related comments here.

kinai 10y ago

"We had raised a total of $2.8M (2 rounds)" "we were burning $100K/m and making $9K/m in revenue" That is how startups in America work: a) take any idea b) find enough believers c) throw money at the problem until it either works out or fails. I mean are those people for real? It's like watching 5y olds playing monopoly How about: If you need millions investment for your idea then your idea is just BAD (except you are building Teslas maybe)

etjossem 10y ago
Agreed. I don't look at this and think "mediocre success", as they described it. I see failure.
ilyaeck 10y ago
They didn't throw "millions" at the idea. If you read the article carefully, they stopped after spending $1M, i.e., with 2/3 of their investors' money still in the bank. Yes, maybe they could've stopped/pivoted sooner, but once you are experimenting with something, you need to be patient enough to give it a shot. And it looks like the investors opted for sticking with the team for their next shot as opposed to taking that money back - an option that was on the table. That's an indicator of trust, so maybe the team isn't that clueless after all.
busterarm 10y ago
I don't necessarily agree. Some businesses simply can't be started without a ton of cash (like building cars like you mentioned). I don't think you could bootstrap a new supermarket concept. Sometimes you just have to get investors to try out an idea.
- kinai 10y ago
  Yea but they were not building Teslas, they were doing some app/site for restaurants... I wonder what they spend 100k a month on.
  - Hydraulix989 10y ago

thebladerunner 10y ago

Gotta love hacker news: I think I just lost half my karma points near me for asking a question, suggesting that maybe, just maybe we shouldn't rush to judge people so negatively. Haters gonna hate...

dang 10y ago
Please don't violate the HN guidelines by going on about downvotes (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html). I agree with you that the comment you replied to was unduly negative. It was probably unfair to downvote yours, though it wasn't particularly substantive. We detached this comment from https://news.ycombinator.com/item?id=11926020 https://news.ycombinator.com/item?id=11926020 and marked it off-topic.

pedalpete 10y ago

Interestingly, I found this post to be full of answers and opportunities in the restaurant space. -> "replace the paper menus and give restaurants full control over their online presence" This isn't a task of selling to a restaurant. Restaurants don't make their own menus, they go to designers. Designers are the customer for new paper menus. They are currently being threatened by Canva, which is making it easier for non-designers to get a better product. ->"[restaurant owner] doesn’t have a spreadsheet estimating how many people show up on a Tuesday night" Uh, HUGE opportunity. Machine learning across what is going on in a city and how that would affect restuarant sales. Network effects (if you're getting data as well as selling answers) and you get to sell the same product again and again and again. I'm maybe not so sure they were looking at the opportunities enough.

ggggtez 10y ago

How is spending 100k/m, while only bringing in 9k/m is a "moderate success"? Their lessons learned is basically "tech startups in the restaurant space is a stupid idea"!

hrkdndkd 10y ago

What exactly did Dishero do? I don't understand from the article.

Rezo 10y ago

Restaurants have terrible margins (in the 3% range [1]) and high failure rates themselves. Selling to them as a startup is like playing on ultrahard mode difficulty, unless you're solving a hair-on-fire level pain point. The total neglect most restaurants show towards their websites and menus would indicate it's actually not a very high priority problem. Startups are already hard just by themselves. If you want to increase your chances, pick a industry with healthy margins. [1] http://smallbusiness.chron.com/average-profit-margin-restaurant-13477.html http://smallbusiness.chron.com/average-profit-margin-restaur...

ultim8k 10y ago

IMHO the wrong thing about most startups (no offence), is that they all want to change the world. Everyone wants to redefine an existing market as that all previous guys who tried to do it were idiots or didn't know a thing about what they were doing. It's not a bad thing to be ambitious but don't think you are the only special in the universe.

rpgmaker 10y ago
I agree. I mean, Dishero was very young. I doubt that in a market as conservative as the one they were in they'd find the magic bullet in less than two years.

deleted 10y ago

[deleted]