7 ms·

The creators of no-longer-with-us products explain what went wrong

126 points by browngeek 16y ago

ABrandt 16y ago
I always find post-mortems like these a bit strange. These founders are all able to develop some pretty convincing reasons why they failed (albeit in hindsight), yet show no signs of acting on it. I understand the feeling of burnout, I have a handful of abandoned projects myself. I've never been able to look back and say that is precisely why I didn't succeed though. Lessons learned is one thing, identifying the one factor that held you back is a bit of a stretch IMO. Interesting side note: The first failed company, Verifiable, links to the sixth failed company, swivel, as an alternative. Apparently charting is a tough space.
- mixmax 16y ago
  While I agree with you I find the same to be true of successful companies. When you ask a successful founder why (s)he succeeded you'l most often get an answer aided by hindsight. It appears to me that nobody truly knows what makes or breaks a company. There are some prerequistes (hard work, focus on customers, etc.) that you have to have, but these aren't enough. My guess is that it's like the weather and financial markets: Chaos (as in chaos theory) reigns, and it's just not possible to know who the winnere or losers are.
  - DanielRibeiro 16y ago
    Once you understand hindsight bias, it seems so blindingly obvious. - @haruki_zaemon
  - enjo 16y ago
    Not exactly. I can't find the citation just this second, but there was an article floating about showing that successful founders tend to be much more successful on subsequent projects than the baseline. I don't think it's chaos or luck. I've argued it before, but there are traits that make successful founders successful. The one that always stands out to me is an absolute laser focus on analytics. These founders are 'obsessively analytical' which allows them to make decisions much faster than others. Starting a company is a race. Your trying to reach profitability (or at least viability) before your current funding dries up. For boot-strapped companies that can be a matter of weeks. For VC companies that can be years. In each of the cases in the article they lost that race. So starting a company is largely about managing that runway. Some people get lucky and just get it right. For the rest of us tracking everything and truly being obsessed with that data allows you to see patterns, opportunities, and problems much faster. I suppose that you could say that data-obsession allows you to achieve hindsight much faster. I have one failed startup (out of three goes). In that one I failed to keep an eye on my data. In particular, I didn't realize just how slowly our development was progressing relative to the amount of runway we had. In the end we released a product that never found a market fit and simply didn't have an opportunity to pivot. We ran out of money, and with it the business went belly-up. My most recent venture is about 3.5 years old. In that time we've had one massive pivot (think entirely new business that utilized about 20% of the code we developed). We managed that by keeping close tabs on our development schedule and releasing as early as possible. It became clear that our initial idea would work, but the cost of acquiring customers was far too high. We felt like we couldn't optimize that cost down to something reasonable in the time-frame that we had left. We did, however, find a new business model along the way and we've aggressively pursued that all the way to profitability. Now we're looking at different data. Conversion rates, traffic, and ad-spend rule my world now. We track everything we can think of. We've found patterns for our business that have allowed us to optimize our spend while increasing traffic. We've moved our conversion rates significantly. We still have a long ways to go, but at this point we have a nice war-chest in the bank and are at the point that we can aggressively scale. Along the way we've pivoted, just less drastically. The product has changed significantly as we've come to understand our market. We're pursuing a couple of opportunities that we never even thought about during initial development. I feel really good about our business. I think we're going to make it. We've done that not through chaos or luck, but measurement and optimization.
    - mixmax 16y ago
      You make an excellent point, and to some degree I agree with you. Particularly it's obvious that there are some traits that are needed, or at least up your chances significantly. You point out focus as a vital ingredient. But there's a flaw to the argument. You can spend all of your time measuring success factors and acting on the data. But there are limits both to how much you data you can make sense of, how much effort you can allow yourself to spend gathering that data, and how you interpret that data. finding a cofounder, for example, is a critical component of success, but how will you pick a good cofounder based on data? Can you even do that? Notwithstanding that the hardest part about finding a cofounder is actually locating potential candidates to pick from. In chaos theory you can actually predict the weather if you have data that's exact enough. But you don't. There's just noway you can measure everything exact enough. I think the same applies here.
run4yourlives 16y ago
Did Storytlr even bother asking people to pay for the service? Seems kind of strange that with 10,000 users you can't at least cover $500 in hosting. At $5 a month, that's only .1% signup required.
- StavrosK 16y ago
  You would be surprised at how few people would pay $5 a month...
  - daviding 16y ago
    That's the truth. I think it's better to replace any arbitrary small monetary value with 'Will Actually Open Wallet'. Once you've got the perceived value of someone willing to open their wallet then other things can start to fall into place.
    - StavrosK 16y ago
      Yep, indeed. We just need to train users to pay for good software. I used to be in the "I don't pay for software, ever" camp, but then I realised people are worth my support and now buy things regularly (especially Android apps, even if the pro version does nothing more than the free version, e.g. Twidroid).
- krschultz 16y ago
  I've seen the if only we get (tiny percentage) of (huge number) to pay (seemingly small amount), we'll be rich! arguement framed about a thousand different ways. I actually cautioned an entrepreneur I was talking to last night about this. Sales start from 0, and they continue from there. Until you have sold it a few times, who knows if .1% is incredibly easy or impossible. Sometimes any number >0 just isn't going to happen.
  - ssskai 16y ago
    How hard could it be to get 1%? I mean if only ask for $1, and get that dollar from only 1% of China, I'd be a millionaire!
steilpass 16y ago
"Vitamin not a pain-killer" is a great metaphor.
- emmett 16y ago
  No, it's a terrible metaphor. The vitamin business is hugely successful! I did the research once and vitamins and supplements actually outsell pain relievers. [ Edit: supporting research I did, which I've now cited twice in comments on Hacker News. I should probably write a blog post. http://news.ycombinator.com/item?id=499929 http://news.ycombinator.com/item?id=499929 ]
  - philwelch 16y ago
    Naturally--one takes a vitamin every day, but a painkiller only when in pain.
  - siglesias 16y ago
    In terms of patentability and profits too?
    - run4yourlives 16y ago
      given -R&D, seems logical that it may be the case.
  - roel_v 16y ago
    I think the point wasn't so much in how successful both industries are, then he could've taken any two industries. The point was that one is very much needed, and the other is nice to have. It's hard to get people to pay for 'nice to have'.
    - run4yourlives 16y ago
      Huh? The guy you responded to shows exactly the opposite, to the tune of vitamins being a larger industry.
- 16y ago
zandorg 16y ago
The good thing about desktop software is if the vendor goes away, the software still works. Not too keen (as a customer) on putting my time and effort into a SAAS hobby project that doesn't scale.
- pinko 16y ago
  Given the rate of change in OS and GUI environments, support libraries, and other APIs, most desktop apps don't work very well for long these days either. Of course unlike SaS you can always continue to use an old version indefinitely in a VM if it really matters. But I find the longevity of the vendor is still critical for supporting new environments and API requirements, and in practice I don't end up discounting the going-out-of-business risk much for desktop apps vs. SaS apps.
  - zandorg 16y ago
    I should say here that I too have the 'old version' problem: The software to send samples to my Akai hardware sampler only runs on Windows 98. I have a Windows 98 PC just for this!
    - pbhjpbhj 16y ago
      >The software to send samples to my Akai hardware sampler only runs on Windows 98. I have a Windows 98 PC just for this! Doesn't it run under emulation, like virtualbox, or even in WINE98 or such?
    - wvenable 16y ago
      But you can still run it, ultimately proving zandorg's point.
    - dhs 16y ago
      It also runs on a Mac II vx, with System 7 and 32mb of RAM.
  - m0nastic 16y ago
    One of my biggest clients is a financial company whose core trading product is based on a commercial product they bought in the 70's (whose manufacturer subsequently went out of business in the 80's). It's continued to run for 30 years, and they wouldn't dream of replacing it. I don't think they're an exception (although I suspect this is less true when you get out of the enterprise environment).
silverlake 16y ago
The linked interview with Swivel was interesting. I'm attempting a data visualization startup. But I've found a niche where customers have a burning need and money but lack the IT resources to implement their own solution. It's not enough to draw charts; Excel can already do that. You have to provide everything customers need, from fetching the data to analyzing the data. And it's still a tough sale because SaaS is newish and people are uncomfortable handing off critical business data. I can think of a dozen other niches where paying customers need data analysis and visualization.
- revorad 16y ago
  I'm also doing a data visualization startup (link in profile). What's yours? Email me if you care to chat.
  - pstuart 16y ago
    You have some solid competition in this space: http://www.tableausoftware.com/ http://www.tableausoftware.com/
    - guelo 16y ago
      If prettygraph.com is based in India his main advantage would be that there's less chance of him immediately caving to U.S. government censorship like tableau just did.
      - revorad 16y ago
        Based in the UK.
    - revorad 16y ago
      Well, I'd be flattered to be considered competition to Tableau. They are a well-funded enterprise software company. I'm just a little guy in a garage :-P
cyen 16y ago
An even larger list of more in-depth post-mortems: http://foundersblock.com/featured/25-best-startup-failure-post-mortems/ http://foundersblock.com/featured/25-best-startup-failure-po...

126 points by browngeek 16y ago

I always find post-mortems like these a bit strange. These founders are all able to develop some pretty convincing reasons why they failed (albeit in hindsight), yet show no signs of acting on it. I understand the feeling of burnout, I have a handful of abandoned projects myself. I've never been able to look back and say that is precisely why I didn't succeed though. Lessons learned is one thing, identifying the one factor that held you back is a bit of a stretch IMO. Interesting side note: The first failed company, Verifiable, links to the sixth failed company, swivel, as an alternative. Apparently charting is a tough space.

mixmax 16y ago
While I agree with you I find the same to be true of successful companies. When you ask a successful founder why (s)he succeeded you'l most often get an answer aided by hindsight. It appears to me that nobody truly knows what makes or breaks a company. There are some prerequistes (hard work, focus on customers, etc.) that you have to have, but these aren't enough. My guess is that it's like the weather and financial markets: Chaos (as in chaos theory) reigns, and it's just not possible to know who the winnere or losers are.
- DanielRibeiro 16y ago
  Once you understand hindsight bias, it seems so blindingly obvious. - @haruki_zaemon
- enjo 16y ago
  Not exactly. I can't find the citation just this second, but there was an article floating about showing that successful founders tend to be much more successful on subsequent projects than the baseline. I don't think it's chaos or luck. I've argued it before, but there are traits that make successful founders successful. The one that always stands out to me is an absolute laser focus on analytics. These founders are 'obsessively analytical' which allows them to make decisions much faster than others. Starting a company is a race. Your trying to reach profitability (or at least viability) before your current funding dries up. For boot-strapped companies that can be a matter of weeks. For VC companies that can be years. In each of the cases in the article they lost that race. So starting a company is largely about managing that runway. Some people get lucky and just get it right. For the rest of us tracking everything and truly being obsessed with that data allows you to see patterns, opportunities, and problems much faster. I suppose that you could say that data-obsession allows you to achieve hindsight much faster. I have one failed startup (out of three goes). In that one I failed to keep an eye on my data. In particular, I didn't realize just how slowly our development was progressing relative to the amount of runway we had. In the end we released a product that never found a market fit and simply didn't have an opportunity to pivot. We ran out of money, and with it the business went belly-up. My most recent venture is about 3.5 years old. In that time we've had one massive pivot (think entirely new business that utilized about 20% of the code we developed). We managed that by keeping close tabs on our development schedule and releasing as early as possible. It became clear that our initial idea would work, but the cost of acquiring customers was far too high. We felt like we couldn't optimize that cost down to something reasonable in the time-frame that we had left. We did, however, find a new business model along the way and we've aggressively pursued that all the way to profitability. Now we're looking at different data. Conversion rates, traffic, and ad-spend rule my world now. We track everything we can think of. We've found patterns for our business that have allowed us to optimize our spend while increasing traffic. We've moved our conversion rates significantly. We still have a long ways to go, but at this point we have a nice war-chest in the bank and are at the point that we can aggressively scale. Along the way we've pivoted, just less drastically. The product has changed significantly as we've come to understand our market. We're pursuing a couple of opportunities that we never even thought about during initial development. I feel really good about our business. I think we're going to make it. We've done that not through chaos or luck, but measurement and optimization.
  - mixmax 16y ago
    You make an excellent point, and to some degree I agree with you. Particularly it's obvious that there are some traits that are needed, or at least up your chances significantly. You point out focus as a vital ingredient. But there's a flaw to the argument. You can spend all of your time measuring success factors and acting on the data. But there are limits both to how much you data you can make sense of, how much effort you can allow yourself to spend gathering that data, and how you interpret that data. finding a cofounder, for example, is a critical component of success, but how will you pick a good cofounder based on data? Can you even do that? Notwithstanding that the hardest part about finding a cofounder is actually locating potential candidates to pick from. In chaos theory you can actually predict the weather if you have data that's exact enough. But you don't. There's just noway you can measure everything exact enough. I think the same applies here.

run4yourlives 16y ago

Did Storytlr even bother asking people to pay for the service? Seems kind of strange that with 10,000 users you can't at least cover $500 in hosting. At $5 a month, that's only .1% signup required.

StavrosK 16y ago
You would be surprised at how few people would pay $5 a month...
- daviding 16y ago
  That's the truth. I think it's better to replace any arbitrary small monetary value with 'Will Actually Open Wallet'. Once you've got the perceived value of someone willing to open their wallet then other things can start to fall into place.
  - StavrosK 16y ago
    Yep, indeed. We just need to train users to pay for good software. I used to be in the "I don't pay for software, ever" camp, but then I realised people are worth my support and now buy things regularly (especially Android apps, even if the pro version does nothing more than the free version, e.g. Twidroid).
krschultz 16y ago
I've seen the if only we get (tiny percentage) of (huge number) to pay (seemingly small amount), we'll be rich! arguement framed about a thousand different ways. I actually cautioned an entrepreneur I was talking to last night about this. Sales start from 0, and they continue from there. Until you have sold it a few times, who knows if .1% is incredibly easy or impossible. Sometimes any number >0 just isn't going to happen.
- ssskai 16y ago
  How hard could it be to get 1%? I mean if only ask for $1, and get that dollar from only 1% of China, I'd be a millionaire!

steilpass 16y ago

"Vitamin not a pain-killer" is a great metaphor.

emmett 16y ago
No, it's a terrible metaphor. The vitamin business is hugely successful! I did the research once and vitamins and supplements actually outsell pain relievers. [ Edit: supporting research I did, which I've now cited twice in comments on Hacker News. I should probably write a blog post. http://news.ycombinator.com/item?id=499929 http://news.ycombinator.com/item?id=499929 ]
- philwelch 16y ago
  Naturally--one takes a vitamin every day, but a painkiller only when in pain.
- siglesias 16y ago
  In terms of patentability and profits too?
  - run4yourlives 16y ago
    given -R&D, seems logical that it may be the case.
- roel_v 16y ago
  I think the point wasn't so much in how successful both industries are, then he could've taken any two industries. The point was that one is very much needed, and the other is nice to have. It's hard to get people to pay for 'nice to have'.
  - run4yourlives 16y ago
    Huh? The guy you responded to shows exactly the opposite, to the tune of vitamins being a larger industry.
16y ago

zandorg 16y ago

The good thing about desktop software is if the vendor goes away, the software still works. Not too keen (as a customer) on putting my time and effort into a SAAS hobby project that doesn't scale.

pinko 16y ago
Given the rate of change in OS and GUI environments, support libraries, and other APIs, most desktop apps don't work very well for long these days either. Of course unlike SaS you can always continue to use an old version indefinitely in a VM if it really matters. But I find the longevity of the vendor is still critical for supporting new environments and API requirements, and in practice I don't end up discounting the going-out-of-business risk much for desktop apps vs. SaS apps.
- zandorg 16y ago
  I should say here that I too have the 'old version' problem: The software to send samples to my Akai hardware sampler only runs on Windows 98. I have a Windows 98 PC just for this!
  - pbhjpbhj 16y ago
    >The software to send samples to my Akai hardware sampler only runs on Windows 98. I have a Windows 98 PC just for this! Doesn't it run under emulation, like virtualbox, or even in WINE98 or such?
  - wvenable 16y ago
    But you can still run it, ultimately proving zandorg's point.
  - dhs 16y ago
    It also runs on a Mac II vx, with System 7 and 32mb of RAM.
- m0nastic 16y ago
  One of my biggest clients is a financial company whose core trading product is based on a commercial product they bought in the 70's (whose manufacturer subsequently went out of business in the 80's). It's continued to run for 30 years, and they wouldn't dream of replacing it. I don't think they're an exception (although I suspect this is less true when you get out of the enterprise environment).

silverlake 16y ago

The linked interview with Swivel was interesting. I'm attempting a data visualization startup. But I've found a niche where customers have a burning need and money but lack the IT resources to implement their own solution. It's not enough to draw charts; Excel can already do that. You have to provide everything customers need, from fetching the data to analyzing the data. And it's still a tough sale because SaaS is newish and people are uncomfortable handing off critical business data. I can think of a dozen other niches where paying customers need data analysis and visualization.

revorad 16y ago
I'm also doing a data visualization startup (link in profile). What's yours? Email me if you care to chat.
- pstuart 16y ago
  You have some solid competition in this space: http://www.tableausoftware.com/ http://www.tableausoftware.com/
  - guelo 16y ago
    If prettygraph.com is based in India his main advantage would be that there's less chance of him immediately caving to U.S. government censorship like tableau just did.
    - revorad 16y ago
      Based in the UK.
  - revorad 16y ago
    Well, I'd be flattered to be considered competition to Tableau. They are a well-funded enterprise software company. I'm just a little guy in a garage :-P

cyen 16y ago

An even larger list of more in-depth post-mortems: http://foundersblock.com/featured/25-best-startup-failure-post-mortems/ http://foundersblock.com/featured/25-best-startup-failure-po...