18 ms·

What I learnt after burning $10M as an entrepreneur

485 points by dsr12 6y ago

practicalpants 6y ago
> 4. Every developer in the world wakes up thinking “I should build a to-do list app” and people love jumping between productivity apps and workflows. There is no moat in productivity—avoid it if you can. This was the elephant in the room so am glad he acknowledged it. Just seemed like an inherently foolish thing to base a business on and then to toil on it for 12 years...
- imtringued 6y ago
  At first I was thinking he just wanted an easy project to get his feet wet and expand his business with relatively low risk if it does fail. I still cannot comprehend how he thought he has to compete over something that other developers use to practice their software development skills and kept doubling down. This is like the "make the best pot vs make as many pots as possible" pottery anecdote. He also completely failed to follow through the bandcamp thinking: You're supposed to put in the bare minimum effort needed for your own company and then try to spin it off as passive income to pay for the development costs and then use the profits to improve the app. If there are no profits then that's when you have to stop.
throwaway0x2 6y ago
I can't stand using Asana. The search sucks, the organization sucks, you can never find what you're looking for, the UI has some of the worst SNR I've ever see. I hate that I'm forced to use it, and that it's being used as a horrible ticket management platform. VC money is a hell of a drug.
- jonathankoren 6y ago
  Asana feels like some designer got drunk on the minimalism kool aid. I just want a ticket id, not a 128 bit guid.
  - zadokshi 6y ago
    What does minimalist design have to do with database sequence number generation? Or am I incorrectly assuming that once sentence is intended to flow on from the previous one and they are just two separate random thoughts. I do agree with your assessment that the UI is a bit too slick for its own good. Slightly annoying in fact.
    - jonathankoren 6y ago
      As a general observation Asana feels intentionally stripped of features for aesthetic reasons, rather than any actual process reasons. A specific casualty of this “Remove all the things!” approach is ticket ids. Perhaps the logic was that since you have a title and a link, that’s all you need. Well, no. Titles can change, but ticket numbers tend to be fixed within teams. Without a short ticket id, it is very difficult to coordinate say git branches/prs to tickets. Whereas if you had a short stable id, you can just name your branch WEB-1234, and know it is associated with ticket WEB-1234. Short stable ids also make it easy to make summary tables, text docs, sms messages, paper notes, and other forms of communication refer to the ticket without constantly copying some excruciatingly long URL, or meaningless hexcode. In my brief experience with Asana, I found it to prioritize form over function. Or as a friend of mine said when comparing to Jira to Asana, “Jira may be a hard configure mess, but at least it knows what problems it’s trying to solve, even if it’s not particularly great at it. Asana doesn’t know what it is.”
- Crazyontap 6y ago
  Also it's so damn slow. Feels like it downloads a movie in bluray quality when I log in. I've had so many friends complain the same, why don't they fix it and why do companies force us to use this :(
  - heterodoxxed 6y ago
    Bloat is one unfortunate side effect of trying to monopolize a market. 80% of users need the core functionality, but catering to the other 20% creates a monster.
- dave_sullivan 6y ago
  Agreed, had to use Asana on a recent project for the most basic issue tracking. Used it for a few months, really didn't like it at all, found the interface confusing and never got used to it. I think trello is the best I've seen, but of course has issues of its own and needs add-ons to do some of the things I want.
- threeseed 6y ago
  Also they outsourced many integrations to third party developers. So Asana is terrible for software development as it lacks the deep integration for Github/Gitlab etc that you get with Jira. And all the third party offers is a basic sync between Asana Tasks and Github Issues.
  - misiti3780 6y ago
    remember when they started, they had a few videos showing there amazing new framework "luna" that was going to change the world? https://blog.asana.com/2010/02/lunascript-our-in-house-language-for-writing-great-web-apps-really-quickly/ https://blog.asana.com/2010/02/lunascript-our-in-house-langu...
- TheOtherHobbes 6y ago
  It seems to be very good for creating mediocre products and/or toxic products with a high social cost. Because it's a meta-market. You don't win by providing a quality product/service, you win by persuading VCs and investors to give you money - which is a completely different game. You "win" as long as that continues. The product/service itself is just a shop front that gets investor money through the door.
blackoil 6y ago
And now even Asana isn't doing that awesome. Good this story is shared. Running a startup is one of the toughest things you can do, it requires balls of steel and virtues of Buddha/Hitler and still luck will be the deciding factor. You need to do everything right a single misstep can kill your company.
- throwawaygimp 6y ago
  WTF? how is this comment downvoted EDIT: Oh got it... surprise surprise guess which company's tech team is hitting refresh every five seconds on this page
  - OhHiMarkos 6y ago
    How one can see the up/down votes in this place?
    - skrebbel 6y ago
      you can't, but when a comment goes below zero it turns gray.
- dealforager 6y ago
  Wow, just looked at their earnings reports and it doesn't look like they've ever turned a profit either. In fact, they are losing over a hundred million a year. No wonder this dude couldn't compete.
contingencies 6y ago
He still didn't learn how to communicate succinctly.
- ghego1 6y ago
  I loved to read the thread, but your comment is spot on. Marketing is not his piece of cake. I would read the same story as: we spent only 10 million dollars over more than a decade to build a better product than Asana, who is bleeding out money and spent hundreds of millions. In the meantime we have also built great customer satisfaction, very good retention and an amazing distributed team years before the WFH hype.
- grumple 6y ago
  He told a story. Imagine if Star Wars was just summarized as, "Some guys with laser swords fought a bunch and the good guys won in the end".
dejongh 6y ago
Thanks for sharing!
everyone 6y ago
Ive never even heard of asana or flow
enriquto 6y ago
Wait. What is a "to-do list app"? What else do you need to maintain a to-do list apart from a single text file and a text editor?
- sherifnada 6y ago
  a to-do list app is a sure fire way to get on the front page of HN
  - abhinav22 6y ago
    Either that or building a lisp parser in rust I kid, I kid - these projects are all good because they are simple and can be achieved by “hackers”, using the original meaning of the term as curious programmers Unfortunately the big projects are hard to do, but that’s why they can charge money for them
    - enriquto 6y ago
      > Either that or building a lisp parser in rust Hmmm, what about a rust parser in lisp? Now, that would be front-page worthy!
      - abhinav22 6y ago
        Indeed! That would be amazing.. Very tempting, must resist going down that rabbit hole :-)
- Traster 6y ago
  It depends how complex you want to get. First, you have tasks and there a few different types, time-bound (do by friday) and ongoing (do every friday), then your tasks have to prioritized, then they have tobe linked to related tasks, often you need to manage dependencies, which can basically be a directed acyclical graph (or worse, a directed cyclical graph). Of course you often also want to be able to get various retrospective views on what tasks have or have not been completed. A sufficiently complex to do list is more like jira than like a text file.
aaronbrethorst 6y ago
Notably, Basecamp is famously anti-native app, and pro-web/hybrid experiences wherever possible
abraae 6y ago
A great and painfully honest and upfront read.
- andyxor 6y ago
  i got an impression this is just a 'submarine' promo for whatever is their current project, which is not surprisingly related to bitcoin, but could have been SEO or some other marketing heavy domain. I see these stories periodically "7 mistakes I made while building a startup" and it always turns out to be just an elaborate ad.
kewp 6y ago
Where did he get $10m without VC money?
- johnx123-up 6y ago
  As per his Twitter bio, he's the co-founder of https://www.tinycapital.com/ https://www.tinycapital.com/
- hammer_mt 6y ago
  He was the founder of a profitable design agency called Metalab https://www.metalab.com/about https://www.metalab.com/about
- quantified 6y ago
  Some of us (well, “them”) have that kind of money!
holoduke 6y ago
I don't know the guy. And I might be wrong, but I think this guy is selfish, arrogant and the I only listen to myself type. Not a great formula for a running a startup.
- wideareanetwork 6y ago
  Weird I got none of that.
  - indeedmug 6y ago
    Well, he did just spelled out why his entire business failed on Twitter. So I don't know how you conclude that he is being arrogant.
- koonsolo 6y ago
  A person like that would blame other people of the failure. Clearly this person owns up to it.
- deleted 6y ago
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hnedeotes 6y ago
Wow, one twitter thread worth reading. I think this is one of the reasons that sincerely the browser should be normalised, have a consistent API across all platforms (including performance characteristics, and native things like movement, sound, etc) and continuously improved, it just evens so much the playing field - by extension it would allow people to actually build novel and interesting ways to use a computer instead of figuring out how to build the same goddamned buttons across platforms. You can't just outcompete the deepness of some pockets when you have to juggle turds across so many layers. I never tried flow, I did use Asana and liked it compared to whatever else was there, I think it's a good product, although they might be a bit overboard on the rainbow confetti scale, but I still think all of these platforms sincerely lack an approach to digital organisation, they all still behave like their paper based flows/ideas. Millions upon millions of $ plus human hours, spent on making a todo app working across platforms. It's a waste of human and societal potential.
- threeseed 6y ago
  > It's a waste of human and societal potential What a ridiculous comment. Productivity apps are the most important apps because they enable others to do great work. It's impossible to collaborate (especially hybrid/remote) without them and when they work poorly they drag good teams down.
  - hnedeotes 6y ago
    > What a ridiculous comment. Only topped by a ridiculous english comprehension. Indeed productivity apps are essential for collaboration specially in async and non-local environments. They should be invested in because there's a lot of uncovered potential there still regarding modes of information organisation. What does that have to do with the fact that to deliver that consistently and performantly across different computing platforms you need to produce N variations of your product?
    - threeseed 6y ago
      I don't think your comment was particularly clear. Flow is not just a todo-app. It's a full project management app similar to Jira and I don't think they would've saved a ton of money not building an iOS or Android app.
johnx123-up 6y ago
Don't miss Dustin's (Asana co-founder) response: https://twitter.com/moskov/status/1377007980063809541 https://twitter.com/moskov/status/1377007980063809541
- ganafagol 6y ago
  This. It sheds some light on how this whole situation actually went down, and in hindsight, this disconnect between perception and reality may well be the root cause of Andrew's failure.
  - heterodoxxed 6y ago
    Or, Dustin is lying or remembering himself in the best light. We'll never really know.
    - luckylion 6y ago
      Hey, he works on projects that help humanity thrive. Like facebook, for example.
    - nemothekid 6y ago
      Spending an hour to gloat is cartoonishly villainous. I thought Andrew was spicing up the story there.
  - joshmanders 6y ago
    This whole story sounds like another Andrew Wilkinson embellishment story. Between this and claiming Slack's only reason for being worth as much as they were was because his design team work early on. My takeaway from this story isn't nearly what Andrew believes his is. What I see is he was so tunnel visioned on trying to crush Asana and be not only the market leader but only option that he neglected his customers needs and wants until they just bailed on Flow for alternative products. Death by a million papercuts, sure, but mostly from his own errors.
- davedx 6y ago
  It's all a bit "He says, she says", isn't it? I think it's not really the point of the Tweets anyway
wideareanetwork 6y ago
Take this charitably, but I’m glad to hear someone fucked up their software business bigger than I did.
underwater 6y ago
He claims they were running a bootstrapped startup, but they were never profitable. So they were funded, just not funded well.
- paulstovell 6y ago
  This is an important comment. When a company gets to profitability, the worst-case outcome is the company stops growing, it loses momentum and closes with a tiny payout. There is always an option to do that. By not aiming for profitability first he bet on spending big in pursuit of growth instead, which is the VC model. He was effectively his own VC in this case. Someone with less funding availability might well write the tweet thread about how they were crushed by the person who had $10m of their own money to spend. I do think it’s great that he wrote this up and I have to say, as a bootstrapped (profitable) startup founder in a space with heavily VC backed competitors, it made me pause.
nmfisher 6y ago
This was, what, 2012? Asana IPO'd last year and still wasn't profitable[0]. In fact, they were bleeding vast amounts of cash and went public with the statement: We do not expect to become profitable in the near future, may never achieve profitability, and have incurred substantial net operating losses, or NOLs, during our history. This is the price of cheap money. VC-backed competitors can simply outspend a bootstrapped company on customer acquisition, marketing, development and hiring, and cash out without the company ever actually making a profit. In the current environment, a bootstrapped company should ideally be: (a) niche (and therefore outside the traditional VC market crosshairs) (b) profitable from day one. A to-do list doesn't fit that mould at all, which this guy found out the hard way. [0] https://sec.report/Document/0001193125-20-228462/ https://sec.report/Document/0001193125-20-228462/
- davedx 6y ago
  Sounds like Snowflake. If you dig into their income statement you see on 264m revenue, they spend 293m on Sales and marketing. [1] Whether Snowflake is actually a great data warehouse product or not, the main driver of its success is that they spend more than a quarter of a billion dollars per year selling it. This is the state of play in the SaaS business. [1] https://www.sec.gov/Archives/edgar/data/1640147/000162828020013010/snowflakes-1.htm#ia73499eb79a34ddeaa563501d30356b0_40 https://www.sec.gov/Archives/edgar/data/1640147/000162828020...
  - PhilipA 6y ago
    That is pretty normal on high scaling SaaS solutions. If you earn 100k a year on a solution, and you know they in average stay for 5 years, you might spend 150k to acquire them as it is still a good business.
    - davedx 6y ago
      By that logic, as long as you're growing you'll always be losing tons of money and never be profitable? How is that a good business model? I mean we're only talking about revenue vs sales and marketing spend here -- the business has a load of other costs too.
heterodoxxed 6y ago
The whole thread really boils down to missing this key point from 37 Signals: | 5. Spend less than they make Had they done that, they could survived long enough to find their niche. But throwing out multiples of your revenue out of your own pocket means you're on borrowed time.
- jariel 6y ago
  Asana, the company that crushed them literally spent considerably more than they earned and beat them. The story is not 'save your money' frankly the story is 'have the most leverage'. There's probably a lot more to it obviously, but it doesn't matter what this CEO did, he was going to be outgunned most likely.
  - imtringued 6y ago
    The idea that a todo app is a capital intensive business is laughable. I have more impressive ideas that can be realized with much less money and that even includes hardware projects that would require hundreds of thousands in machine tools. All these guys really needed to do was make one really good iOS app and make sure they don't spend too much money on it.
    - objclxt 6y ago
      > The idea that a todo app is a capital intensive business is laughable It’s not just the building of the app that’s capital intensive - it’s the customer acquisition cost. A highly capitalised startup with a war chest can afford to spend $100+ per customer. You can’t. It’s like the OP thread says - you can’t field of dreams this. “If you build it they will come” is not a business strategy when your competitor is spending millions of dollars on ads.
  - Germanika 6y ago
    Both approaches can work, but lead to different outcomes. The market for "todo list" apps is absolutely big enough there's room for more than one company. The beauty of the bootstrapped model is you don't need to "win the market" or "beat the competition". Is it making a profit? Congratulations! You're now the owner successful company. Want to grow the company? Re-invest the profits, not your personal life savings. If the goal is to "win"... ya, you're probably going to need to spend money like it's someone else's, and should take that VC money.
n4r9 6y ago
Taking this at face value, it feels like a VC market is not a particularly efficient way to produce value for the general public. Success is way more contingent on how long a company can shoulder losses for rather than how good the product is. Similar situations seem to be happening with rideshare apps: although there is some innovation, right now it feels like they're all hanging on by their nails and hoping for their competitors to run out of money.
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kilroy123 6y ago
I feel this guys pain. I too did the same thing with a startup, only at a much smaller scale. Failure, sometimes, really is the only way to learn.
EVa5I7bHFq9mnYK 6y ago
I kept reading for 3 minutes and still couldn't get a grasp on what kind of "agency" he was talking about. Real estate agency? Literary agency? Travel agency? Can anyone who finished reading tell me?
- unishark 6y ago
  Yes I didn't get this either. My guess is he meant software contracting or something related, making software to order rather than making their own products. And presumably he could've switched to a SaaS business model without leaping into a completely different market. Instead he should have stuck with some B2B area he was already working in and knew well. That was the high-risk part in my opinion.
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- cambalache 6y ago
  This is just a techbro(well, more like middle aged) story, full of all the usual ingredients:Narcissism, overestimation of their impact on society, virtue-signaling, extrapolating personal experiences to the whole society. Give me better a story about a Turkish butcher(including he calling names to the mom of his competition) any day of the week.
- enonevets 6y ago
  Metalab is a software/design development agency. 37Signals (now Basecamp) started as the same kind of agency.
- deleted 6y ago
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- 5560675260 6y ago
  He has a link in his twitter bio - it's software agency. It's also possible to get it from context - he mentions grabbing devs from it to build Flow.
JackPoach 6y ago
Well, it's worth noting that there are a ton of hugely successful project management platforms launched after Asana - Bitrix24, Monday, Clickup, Notion, Airtable and so on. Asana did not crush other players.
unishark 6y ago
One glaring issue I see, is the 12 years part. And I don't mean in the simple banging-head-against-wall versus know-when-to-quit sense. Even if the sunk cost was zero, once decades start passing, even the slowest and most bureaucratic dinosaur will be able to catch up with you. In my opinion he needed to move on to some new adjacent product or aspect of the market where he could have an advantage again. Not just piling on features that those competitors could do too.
austhrow743 6y ago
It doesn’t sound like he was on the bootstrapping koolaid as much as he thinks he was. Dude just vc’d his own company. So his first conclusion doesn’t fit. You can’t play the vc game, get out vc’d, then conclude that bootstrapped can’t compete. Well I guess you can, but you shouldn’t! It’s entirely possible there were enough people who liked Flow and didn’t need mobile and native apps for Flow to have been the Basecamp of his dreams. We/he don’t know because he didn’t try for it. Edit: looks like he’s a vc now. Can’t help but wonder if instead of horribly misinterpreting his own story, he’s intentionally misrepresenting the conclusion. Frighten bootstrappers in to getting in touch to sell or take on funding.
- twelve40 6y ago
  That's an excellent point about definitely spending way over what's usually understood as bootstrapping. However, one could counter-argue that bootstrapping would have made this even more painful, and this market is just not cut out for it. Kind of like you can't really bootstrap a Facebook replacement today, VC money, personal wealth or not.
  - randomsearch 6y ago
    > you can't really bootstrap a Facebook replacement today why not?
    - OmegaPG 6y ago
      Probably because server usage alone will be $50k/month for just few million users. Customer oriented products (B2C, C2C) rarely makes money in initial days.
      - randomsearch 6y ago
        You're assuming you would give away your Facebook replacement for free, and not make any money from it up to millions of users. Just because Facebook began that way doesn't mean its replacement must. Google Docs was free when Word was downloaded and paid for. Whatsapp was paid for when other chat was free or included in your contract. There are many business models and ways to grow. It's hard, but I think you could bootstrap a Facebook replacement... over a very long time!
dragonsh 6y ago
For people tired of scrolling Twitter thread here is the link in blog format. https://mythreadreader.com/awilkinson/1376985854229504007 https://mythreadreader.com/awilkinson/1376985854229504007
- eptcyka 6y ago
  Reading the same text on twitter is unbearable.
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polote 6y ago
This is a pretty hypocrite thread. The guy is successful, has a lot of money. He starts a company thinking that because he has the best product he is going to win the market. Things don't go as planned. Blame the VC and competitors for it. First, his company was VC founded. He poured 10M in the company that's very close to having raised 10M Second, you dont go out of business because someone created a competing offers Last, he his a successful guy, it is difficult to go openly on Twitter and says "I failed because we were not good enough" it is easier to follow the trend of our time saying that VC is evil.
- erwinh 6y ago
  I read it as a pretty reflective thread of him admitting he was multiple strategic steps behind Asana at pretty much every stage of growth because of his own ignorance about where VC money can actually be useful.
- brayhite 6y ago
  Hm, my conclusion of the thread was less “VC is evil” and more like “We underestimated the impact VC had and overestimated the impact “organic growth” would have for us.” What’s hypocritical about that?
jcpham2 6y ago
5 tweets deep it hits you with the signup or login to read and then it’s tab over
aogaili 6y ago
Since neither Flow nor Asana are innovative ideas for a startup, they basically ended up competing in a zero-sum game trying to out spend each other in marketing and features. That is why innovation and finding a niche with loyal users are key ingredients for startups. But in SV, you can keep pumping money onto a mediocre ideas/products round after round and increase it's valuation. Basically drying out the competition (our author in this case) and pushing their products down the market throat using sheer force powered by marketing and developers VC supplied capital.
devops000 6y ago
You are comparing your profit versus Asana revenue. After all these years, does Asana is profitable? If it doesn't I think they didn't win either. You both have lose.
gregoire 6y ago
This thread is missing a link to the actual product, so here it is: https://www.getflow.com/ https://www.getflow.com/ They launched a new version last fall: https://www.getflow.com/blog/flow-x-is-launching-in-september https://www.getflow.com/blog/flow-x-is-launching-in-septembe...
- syspec 6y ago
  Wow it actually looks really nice, if this came out today it would be a hit... but because it has been around for a while it it has the sheen of being boring on it. Otherwise I cannot tell why it is not more succrsssful
madengr 6y ago
Is all this (for both companies) for a damned task listing app? I can do the same with a paper and pencil.
zcw100 6y ago
Once you get past the David vs Goliath ethos, we are left with "I had invested millions of dollars, without even realizing it" and "my CFO was freaking out" was a big part of the problem. What was omitted was, "and I didn't listen to any of them". I also liked how everyone else was drinking the cool-aid but thinking you're going to make a billion dollars on your to-do app isn't.
pabe 6y ago
This in an incredibly valuable Twitter thread. As an entrepreneur, you have to decide very carefully about the market you want to conquer. Or, in the words of Sun Tzu: "If a battle can't be won, don't fight it." - For companies backed by big VCs, money basically does not exist. They can spend ten dollars to earn one as long as the story of building a leading brand can be told. Vanity metrics play an important role here. The primary target is to go public to cash out. There is _no way_ winning against such a player if you're not backed the same way.
lbriner 6y ago
The things about SaaS is that it is as easy to do for others as it is for us. So if we think that something was sort of easy to build and get loads of money for, then competition is inevitable. There are a few ways to survive the competition: 1) Do something that you have special experience or skills in so that not so many people could copy it if they wanted to. Maybe you know lots about the financial markets or aerospace. 2) Go into a specific market that the General Practioners (especially the Unicorns) are less likely to target. For example, UK Healthcare or German Finance, which could be super-targetted at the niche and provide a lot of value for money, even over a relatively small number of customers. Some finance software houses only have double-digit customer numbers but very high markups. 3) In some cases, solve a problem in a novel way that once people get hooked into it, they cannot directly compare you to the competition. If it looks just like a t-card task system, it is easy to compare. If you give the entities different names and have a workflow that solves the problem in a roundabout way, maybe people won't know that they could swap to Asana. 4) Add lots of integrations and make it really sticky with people's other systems. Many customers today will literally choose a supplier based on whether they offer a Salesforce integration or not (even if it doesn't make logical sense for your product!) 5) If you really want to go big, you have to go early, well and fast! AOL and Yahoo might have gone early but not necessarily well or fast. AirBnB went early, fairly well and fast. It sounds like Flow did not necessarily go very early, went fairly well but could not go fast enough.
plehoux 6y ago
We're in a competitive SAAS market, raised no money, don't do marketing, work exclusively on the product, and offer good customer support. Our competitors raised > 100 million dollars, and daily we get customers from them. And we are not named Jason or DHH; our blog posts usually get 100 views... We just reached $1M in ARR. Yes, it is all possible; their problem is they tried to compete directly on the same terms, you can't outspend a VC-backed business.
- j4yav 6y ago
  Have you written about your early days? I’d love to hear more. I’m at the very beginning of what I hope is a similar journey with my side project.
lee 6y ago
One aspect of bootstrapping I imagine is the "fail-fast" principle. If you can't compete while spending less than your revenue you should take it as a sign that your current business is not "boot-strappable". Doesn't sound like he bootstrapped.
rory_h_r 6y ago
That $10M wasn't wasted for me as an Asana/Jira user because they forced Asana and Jira to get better.
canadianfella 6y ago
Learnt is a weird word.
rkagerer 6y ago
The best product doesn’t always win, and product is not a longterm competitive advantage. I have trouble swallowing this one. He decided to compete on product, but instead spent more of their limited resources on other things. We started burning money on ads and hiring sales people In order to stay competitive, we had underinvested in our engineering team due to cash constraints and stretched them across mobile, desktop, and web. We started to get an endless stream of bug reports from our customers. Our clients were unreliable and had syncing issues This smells to me like neglected product and over-stretched developers. Chasing new features instead of building solid foundations by selecting the most important ones and getting them right first. As a customer, as soon as I see something like "sync issues" that's a dealbreaker. If I can't trust your product to keep my data safe, I'll stop using it. It does look like they eventually figured that out: We had to hit pause and spend years — literally years — rewriting all of our clients But by then the competition had decisively out-producted them: One day recently, I looked at Asana and it slapped me in the face: It’s better.
- arminiusreturns 6y ago
  I hate seeing this very thing play out in real time, but I find it particularly sad when investors and VCs then takeover the board and outmaneuver the founders and Csuite to the point they barely run the company anymore. They take advantage of technical founders without the board level chops to do this. Then short term focus or otherwise misaligned incentives mean the board slowly, but unknowingly, runs the company into the ground. (by doing stuff like hiring a bunch of marketing people while the technical debt starts piling sky high...)
- r0fl 6y ago
  Completely agree! The best product does always win. The founder did not focus on making the product better but jumped from marketing to design, to raising money, to expanding the team. The product did not keep getting better and they lost. 1. If you are in a competitive VC-funded space, it’s foolish to compete without raising money. Don't bring a knife to a gun fight. Again, not true. You win if your product is better. Think outside the box, and make something that no one else has made and users will love it and you will win. I'm not saying that is easy to do. Just that's what wins.
hartator 6y ago
> burning over $150,000 per month ... Flow did about $3MM of ARR How did they run out of money? Something doesn't add up.
- bb611 6y ago
  Presumably paying salaries, hosting/hardware, and he specifically calls out marketing costs.
- mattm 6y ago
  I think burning here means losing $150k per month. So they had $400k in monthly expenses.
yoyonamite 6y ago
One thing 37Signals is very good at is limiting the scope of what they're trying to accomplish and market those limitations as a strength. Instead of doing that, it sounds like they tried to compete directly on features against competition that could outspend them.
ben7799 6y ago
I had this pop up in my twitter feed independently. When I went to go look at it's basically a lite version of something like Jira. Far less featured, maybe not targetted as much at software development. In competitive sales analyses (easy to find) it completely loses... far less features, integration, etc.. and yet quite a bit more expensive. It's base starting price is quite expensive compared to the competition (not just vs Jira). It seems like the product had a lot of things they could have done to improve it and they just didn't execute very well. It's a weird product area.. I kind of hate Jira, but I also kind of hate every other project management software I've ever used. It seems like they came at it from the "we're expert UI/designer" types as opposed to project management/development experts. Maybe they cut down their features and kept it too simple out of a sense of design purity. It also sounds like he had success in other areas that were easier and didn't stress his business management skills, but this product did and he didn't listen to his business partners or seek out better managers to help make the right decision. Perhaps he was blinded by his previous success. It's an interesting read. As an engineer I would have been very very skeptical to join a team working in this area because my gut feeling would just be bad due to how many products have failed or been mediocre in this product space.
- sjg007 6y ago
  >competitive sales analyses (easy to find) it completely loses. Could you please share? I wasn't able to find anything.
  - ben7799 6y ago
    Just search "Jira vs Flow" or "Jira vs Asana" or "Flow vs Asana" and you will find a bunch of sites showing competitive breakdowns. Flow looks way more tailored towards simple SMBs that you would think would have trouble dealing with something like Jira. But Jira starts with a Free tier for < 10 users and the next level up is $7/month/user. Flow starts at $53/month for 6 users. With far fewer features. The next tier is just "only by quote". Flow is the least featured but it's starting price point seems to be the most expensive.
- skeeter2020 6y ago
coltons 6y ago
I want to point out that Asana CEO meeting OP for coffee and basically starting a competition is one of the healthiest and most amazing things I have ever read/heard about. The market was a game. Amazing, and something you only read about happening in startup land.
PaywallBuster 6y ago
1. Don't compete with deep pocketed VCs. 2. Keep costs minimal, offshore if required.
offsky 6y ago
As the founder of Toodledo this really resonated with me. When I launched my todo site it was just me and Remember the Milk. I had one of the first iOS todo apps in the store and I rode that wave. Grew to 7 employees. Then came Reminders and Flow and Asana and Wonderlist and Things and Todoist and ...
- Terretta 6y ago
  But you were the one with the pluggable API if I recall, and so able to work across platforms and with other apps, while also being rich enough to implement a “GTD” type system. I could tie a number of things to you, making me a happy subscriber! Thinking back, I think the thing that eventually pushed a shift was not the ones you mention, but Trello, thanks to Kanban w/ card flipping mechanic, along with “team” boards w/ permissions.
motohagiography 6y ago
That thread made it click for me what his, my own, and other company problems were. We usually don't know why a product is a product, because acknowledging it would make its effect disappear. Thank you, I get this perfectly now.
waylandsmithers 6y ago
What is implied but not specifically stated in his lessons learned is that selling your time while also selling a product is VERY difficult to pull off. Fried/DHH eventually turned into a product company to focus solely on Basecamp, and I think the Ruby on Rails thing also makes their case entirely off the table for basis of comparison for why your consulting business could generate some quick and easy extra cash from a saas product build by the billable employees on the bench.
pahbloo 6y ago
Reply from DHH: https://world.hey.com/dhh/it-s-hard-to-draw-lessons-from-your-own-failures-d4608094 https://world.hey.com/dhh/it-s-hard-to-draw-lessons-from-you...

485 points by dsr12 6y ago

> 4. Every developer in the world wakes up thinking “I should build a to-do list app” and people love jumping between productivity apps and workflows. There is no moat in productivity—avoid it if you can. This was the elephant in the room so am glad he acknowledged it. Just seemed like an inherently foolish thing to base a business on and then to toil on it for 12 years...

imtringued 6y ago
At first I was thinking he just wanted an easy project to get his feet wet and expand his business with relatively low risk if it does fail. I still cannot comprehend how he thought he has to compete over something that other developers use to practice their software development skills and kept doubling down. This is like the "make the best pot vs make as many pots as possible" pottery anecdote. He also completely failed to follow through the bandcamp thinking: You're supposed to put in the bare minimum effort needed for your own company and then try to spin it off as passive income to pay for the development costs and then use the profits to improve the app. If there are no profits then that's when you have to stop.

throwaway0x2 6y ago

I can't stand using Asana. The search sucks, the organization sucks, you can never find what you're looking for, the UI has some of the worst SNR I've ever see. I hate that I'm forced to use it, and that it's being used as a horrible ticket management platform. VC money is a hell of a drug.

jonathankoren 6y ago
Asana feels like some designer got drunk on the minimalism kool aid. I just want a ticket id, not a 128 bit guid.
- zadokshi 6y ago
  What does minimalist design have to do with database sequence number generation? Or am I incorrectly assuming that once sentence is intended to flow on from the previous one and they are just two separate random thoughts. I do agree with your assessment that the UI is a bit too slick for its own good. Slightly annoying in fact.
  - jonathankoren 6y ago
    As a general observation Asana feels intentionally stripped of features for aesthetic reasons, rather than any actual process reasons. A specific casualty of this “Remove all the things!” approach is ticket ids. Perhaps the logic was that since you have a title and a link, that’s all you need. Well, no. Titles can change, but ticket numbers tend to be fixed within teams. Without a short ticket id, it is very difficult to coordinate say git branches/prs to tickets. Whereas if you had a short stable id, you can just name your branch WEB-1234, and know it is associated with ticket WEB-1234. Short stable ids also make it easy to make summary tables, text docs, sms messages, paper notes, and other forms of communication refer to the ticket without constantly copying some excruciatingly long URL, or meaningless hexcode. In my brief experience with Asana, I found it to prioritize form over function. Or as a friend of mine said when comparing to Jira to Asana, “Jira may be a hard configure mess, but at least it knows what problems it’s trying to solve, even if it’s not particularly great at it. Asana doesn’t know what it is.”
Crazyontap 6y ago
Also it's so damn slow. Feels like it downloads a movie in bluray quality when I log in. I've had so many friends complain the same, why don't they fix it and why do companies force us to use this :(
- heterodoxxed 6y ago
  Bloat is one unfortunate side effect of trying to monopolize a market. 80% of users need the core functionality, but catering to the other 20% creates a monster.
dave_sullivan 6y ago
Agreed, had to use Asana on a recent project for the most basic issue tracking. Used it for a few months, really didn't like it at all, found the interface confusing and never got used to it. I think trello is the best I've seen, but of course has issues of its own and needs add-ons to do some of the things I want.
threeseed 6y ago
Also they outsourced many integrations to third party developers. So Asana is terrible for software development as it lacks the deep integration for Github/Gitlab etc that you get with Jira. And all the third party offers is a basic sync between Asana Tasks and Github Issues.
- misiti3780 6y ago
  remember when they started, they had a few videos showing there amazing new framework "luna" that was going to change the world? https://blog.asana.com/2010/02/lunascript-our-in-house-language-for-writing-great-web-apps-really-quickly/ https://blog.asana.com/2010/02/lunascript-our-in-house-langu...
TheOtherHobbes 6y ago
It seems to be very good for creating mediocre products and/or toxic products with a high social cost. Because it's a meta-market. You don't win by providing a quality product/service, you win by persuading VCs and investors to give you money - which is a completely different game. You "win" as long as that continues. The product/service itself is just a shop front that gets investor money through the door.

blackoil 6y ago

And now even Asana isn't doing that awesome. Good this story is shared. Running a startup is one of the toughest things you can do, it requires balls of steel and virtues of Buddha/Hitler and still luck will be the deciding factor. You need to do everything right a single misstep can kill your company.

throwawaygimp 6y ago
WTF? how is this comment downvoted EDIT: Oh got it... surprise surprise guess which company's tech team is hitting refresh every five seconds on this page
- OhHiMarkos 6y ago
  How one can see the up/down votes in this place?
  - skrebbel 6y ago
    you can't, but when a comment goes below zero it turns gray.
dealforager 6y ago
Wow, just looked at their earnings reports and it doesn't look like they've ever turned a profit either. In fact, they are losing over a hundred million a year. No wonder this dude couldn't compete.

contingencies 6y ago

He still didn't learn how to communicate succinctly.

ghego1 6y ago
I loved to read the thread, but your comment is spot on. Marketing is not his piece of cake. I would read the same story as: we spent only 10 million dollars over more than a decade to build a better product than Asana, who is bleeding out money and spent hundreds of millions. In the meantime we have also built great customer satisfaction, very good retention and an amazing distributed team years before the WFH hype.
grumple 6y ago
He told a story. Imagine if Star Wars was just summarized as, "Some guys with laser swords fought a bunch and the good guys won in the end".

dejongh 6y ago

Thanks for sharing!

everyone 6y ago

Ive never even heard of asana or flow

enriquto 6y ago

Wait. What is a "to-do list app"? What else do you need to maintain a to-do list apart from a single text file and a text editor?

sherifnada 6y ago
a to-do list app is a sure fire way to get on the front page of HN
- abhinav22 6y ago
  Either that or building a lisp parser in rust I kid, I kid - these projects are all good because they are simple and can be achieved by “hackers”, using the original meaning of the term as curious programmers Unfortunately the big projects are hard to do, but that’s why they can charge money for them
  - enriquto 6y ago
    > Either that or building a lisp parser in rust Hmmm, what about a rust parser in lisp? Now, that would be front-page worthy!
    - abhinav22 6y ago
      Indeed! That would be amazing.. Very tempting, must resist going down that rabbit hole :-)
Traster 6y ago
It depends how complex you want to get. First, you have tasks and there a few different types, time-bound (do by friday) and ongoing (do every friday), then your tasks have to prioritized, then they have tobe linked to related tasks, often you need to manage dependencies, which can basically be a directed acyclical graph (or worse, a directed cyclical graph). Of course you often also want to be able to get various retrospective views on what tasks have or have not been completed. A sufficiently complex to do list is more like jira than like a text file.

aaronbrethorst 6y ago

Notably, Basecamp is famously anti-native app, and pro-web/hybrid experiences wherever possible

abraae 6y ago

A great and painfully honest and upfront read.

andyxor 6y ago
i got an impression this is just a 'submarine' promo for whatever is their current project, which is not surprisingly related to bitcoin, but could have been SEO or some other marketing heavy domain. I see these stories periodically "7 mistakes I made while building a startup" and it always turns out to be just an elaborate ad.

kewp 6y ago

Where did he get $10m without VC money?

johnx123-up 6y ago
As per his Twitter bio, he's the co-founder of https://www.tinycapital.com/ https://www.tinycapital.com/
hammer_mt 6y ago
He was the founder of a profitable design agency called Metalab https://www.metalab.com/about https://www.metalab.com/about
quantified 6y ago
Some of us (well, “them”) have that kind of money!

holoduke 6y ago

I don't know the guy. And I might be wrong, but I think this guy is selfish, arrogant and the I only listen to myself type. Not a great formula for a running a startup.

wideareanetwork 6y ago
Weird I got none of that.
- indeedmug 6y ago
  Well, he did just spelled out why his entire business failed on Twitter. So I don't know how you conclude that he is being arrogant.
koonsolo 6y ago
A person like that would blame other people of the failure. Clearly this person owns up to it.
deleted 6y ago
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hnedeotes 6y ago

Wow, one twitter thread worth reading. I think this is one of the reasons that sincerely the browser should be normalised, have a consistent API across all platforms (including performance characteristics, and native things like movement, sound, etc) and continuously improved, it just evens so much the playing field - by extension it would allow people to actually build novel and interesting ways to use a computer instead of figuring out how to build the same goddamned buttons across platforms. You can't just outcompete the deepness of some pockets when you have to juggle turds across so many layers. I never tried flow, I did use Asana and liked it compared to whatever else was there, I think it's a good product, although they might be a bit overboard on the rainbow confetti scale, but I still think all of these platforms sincerely lack an approach to digital organisation, they all still behave like their paper based flows/ideas. Millions upon millions of $ plus human hours, spent on making a todo app working across platforms. It's a waste of human and societal potential.

threeseed 6y ago
> It's a waste of human and societal potential What a ridiculous comment. Productivity apps are the most important apps because they enable others to do great work. It's impossible to collaborate (especially hybrid/remote) without them and when they work poorly they drag good teams down.
- hnedeotes 6y ago
  > What a ridiculous comment. Only topped by a ridiculous english comprehension. Indeed productivity apps are essential for collaboration specially in async and non-local environments. They should be invested in because there's a lot of uncovered potential there still regarding modes of information organisation. What does that have to do with the fact that to deliver that consistently and performantly across different computing platforms you need to produce N variations of your product?
  - threeseed 6y ago
    I don't think your comment was particularly clear. Flow is not just a todo-app. It's a full project management app similar to Jira and I don't think they would've saved a ton of money not building an iOS or Android app.

johnx123-up 6y ago

Don't miss Dustin's (Asana co-founder) response: https://twitter.com/moskov/status/1377007980063809541 https://twitter.com/moskov/status/1377007980063809541

ganafagol 6y ago
This. It sheds some light on how this whole situation actually went down, and in hindsight, this disconnect between perception and reality may well be the root cause of Andrew's failure.
- heterodoxxed 6y ago
  Or, Dustin is lying or remembering himself in the best light. We'll never really know.
  - luckylion 6y ago
    Hey, he works on projects that help humanity thrive. Like facebook, for example.
  - nemothekid 6y ago
    Spending an hour to gloat is cartoonishly villainous. I thought Andrew was spicing up the story there.
- joshmanders 6y ago
  This whole story sounds like another Andrew Wilkinson embellishment story. Between this and claiming Slack's only reason for being worth as much as they were was because his design team work early on. My takeaway from this story isn't nearly what Andrew believes his is. What I see is he was so tunnel visioned on trying to crush Asana and be not only the market leader but only option that he neglected his customers needs and wants until they just bailed on Flow for alternative products. Death by a million papercuts, sure, but mostly from his own errors.
davedx 6y ago
It's all a bit "He says, she says", isn't it? I think it's not really the point of the Tweets anyway

wideareanetwork 6y ago

Take this charitably, but I’m glad to hear someone fucked up their software business bigger than I did.

underwater 6y ago

He claims they were running a bootstrapped startup, but they were never profitable. So they were funded, just not funded well.

paulstovell 6y ago
This is an important comment. When a company gets to profitability, the worst-case outcome is the company stops growing, it loses momentum and closes with a tiny payout. There is always an option to do that. By not aiming for profitability first he bet on spending big in pursuit of growth instead, which is the VC model. He was effectively his own VC in this case. Someone with less funding availability might well write the tweet thread about how they were crushed by the person who had $10m of their own money to spend. I do think it’s great that he wrote this up and I have to say, as a bootstrapped (profitable) startup founder in a space with heavily VC backed competitors, it made me pause.

nmfisher 6y ago

This was, what, 2012? Asana IPO'd last year and still wasn't profitable[0]. In fact, they were bleeding vast amounts of cash and went public with the statement: We do not expect to become profitable in the near future, may never achieve profitability, and have incurred substantial net operating losses, or NOLs, during our history. This is the price of cheap money. VC-backed competitors can simply outspend a bootstrapped company on customer acquisition, marketing, development and hiring, and cash out without the company ever actually making a profit. In the current environment, a bootstrapped company should ideally be: (a) niche (and therefore outside the traditional VC market crosshairs) (b) profitable from day one. A to-do list doesn't fit that mould at all, which this guy found out the hard way. [0] https://sec.report/Document/0001193125-20-228462/ https://sec.report/Document/0001193125-20-228462/

davedx 6y ago
Sounds like Snowflake. If you dig into their income statement you see on 264m revenue, they spend 293m on Sales and marketing. [1] Whether Snowflake is actually a great data warehouse product or not, the main driver of its success is that they spend more than a quarter of a billion dollars per year selling it. This is the state of play in the SaaS business. [1] https://www.sec.gov/Archives/edgar/data/1640147/000162828020013010/snowflakes-1.htm#ia73499eb79a34ddeaa563501d30356b0_40 https://www.sec.gov/Archives/edgar/data/1640147/000162828020...
- PhilipA 6y ago
  That is pretty normal on high scaling SaaS solutions. If you earn 100k a year on a solution, and you know they in average stay for 5 years, you might spend 150k to acquire them as it is still a good business.
  - davedx 6y ago
    By that logic, as long as you're growing you'll always be losing tons of money and never be profitable? How is that a good business model? I mean we're only talking about revenue vs sales and marketing spend here -- the business has a load of other costs too.

heterodoxxed 6y ago

The whole thread really boils down to missing this key point from 37 Signals: | 5. Spend less than they make Had they done that, they could survived long enough to find their niche. But throwing out multiples of your revenue out of your own pocket means you're on borrowed time.

jariel 6y ago
Asana, the company that crushed them literally spent considerably more than they earned and beat them. The story is not 'save your money' frankly the story is 'have the most leverage'. There's probably a lot more to it obviously, but it doesn't matter what this CEO did, he was going to be outgunned most likely.
- imtringued 6y ago
  The idea that a todo app is a capital intensive business is laughable. I have more impressive ideas that can be realized with much less money and that even includes hardware projects that would require hundreds of thousands in machine tools. All these guys really needed to do was make one really good iOS app and make sure they don't spend too much money on it.
  - objclxt 6y ago
    > The idea that a todo app is a capital intensive business is laughable It’s not just the building of the app that’s capital intensive - it’s the customer acquisition cost. A highly capitalised startup with a war chest can afford to spend $100+ per customer. You can’t. It’s like the OP thread says - you can’t field of dreams this. “If you build it they will come” is not a business strategy when your competitor is spending millions of dollars on ads.
- Germanika 6y ago
  Both approaches can work, but lead to different outcomes. The market for "todo list" apps is absolutely big enough there's room for more than one company. The beauty of the bootstrapped model is you don't need to "win the market" or "beat the competition". Is it making a profit? Congratulations! You're now the owner successful company. Want to grow the company? Re-invest the profits, not your personal life savings. If the goal is to "win"... ya, you're probably going to need to spend money like it's someone else's, and should take that VC money.

n4r9 6y ago

Taking this at face value, it feels like a VC market is not a particularly efficient way to produce value for the general public. Success is way more contingent on how long a company can shoulder losses for rather than how good the product is. Similar situations seem to be happening with rideshare apps: although there is some innovation, right now it feels like they're all hanging on by their nails and hoping for their competitors to run out of money.

deleted 6y ago

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kilroy123 6y ago

I feel this guys pain. I too did the same thing with a startup, only at a much smaller scale. Failure, sometimes, really is the only way to learn.

EVa5I7bHFq9mnYK 6y ago

I kept reading for 3 minutes and still couldn't get a grasp on what kind of "agency" he was talking about. Real estate agency? Literary agency? Travel agency? Can anyone who finished reading tell me?

unishark 6y ago
Yes I didn't get this either. My guess is he meant software contracting or something related, making software to order rather than making their own products. And presumably he could've switched to a SaaS business model without leaping into a completely different market. Instead he should have stuck with some B2B area he was already working in and knew well. That was the high-risk part in my opinion.
- deleted 6y ago
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cambalache 6y ago
This is just a techbro(well, more like middle aged) story, full of all the usual ingredients:Narcissism, overestimation of their impact on society, virtue-signaling, extrapolating personal experiences to the whole society. Give me better a story about a Turkish butcher(including he calling names to the mom of his competition) any day of the week.
enonevets 6y ago
Metalab is a software/design development agency. 37Signals (now Basecamp) started as the same kind of agency.
deleted 6y ago
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5560675260 6y ago
He has a link in his twitter bio - it's software agency. It's also possible to get it from context - he mentions grabbing devs from it to build Flow.

JackPoach 6y ago

Well, it's worth noting that there are a ton of hugely successful project management platforms launched after Asana - Bitrix24, Monday, Clickup, Notion, Airtable and so on. Asana did not crush other players.

unishark 6y ago

One glaring issue I see, is the 12 years part. And I don't mean in the simple banging-head-against-wall versus know-when-to-quit sense. Even if the sunk cost was zero, once decades start passing, even the slowest and most bureaucratic dinosaur will be able to catch up with you. In my opinion he needed to move on to some new adjacent product or aspect of the market where he could have an advantage again. Not just piling on features that those competitors could do too.

austhrow743 6y ago

It doesn’t sound like he was on the bootstrapping koolaid as much as he thinks he was. Dude just vc’d his own company. So his first conclusion doesn’t fit. You can’t play the vc game, get out vc’d, then conclude that bootstrapped can’t compete. Well I guess you can, but you shouldn’t! It’s entirely possible there were enough people who liked Flow and didn’t need mobile and native apps for Flow to have been the Basecamp of his dreams. We/he don’t know because he didn’t try for it. Edit: looks like he’s a vc now. Can’t help but wonder if instead of horribly misinterpreting his own story, he’s intentionally misrepresenting the conclusion. Frighten bootstrappers in to getting in touch to sell or take on funding.

twelve40 6y ago
That's an excellent point about definitely spending way over what's usually understood as bootstrapping. However, one could counter-argue that bootstrapping would have made this even more painful, and this market is just not cut out for it. Kind of like you can't really bootstrap a Facebook replacement today, VC money, personal wealth or not.
- randomsearch 6y ago
  > you can't really bootstrap a Facebook replacement today why not?
  - OmegaPG 6y ago
    Probably because server usage alone will be $50k/month for just few million users. Customer oriented products (B2C, C2C) rarely makes money in initial days.
    - randomsearch 6y ago
      You're assuming you would give away your Facebook replacement for free, and not make any money from it up to millions of users. Just because Facebook began that way doesn't mean its replacement must. Google Docs was free when Word was downloaded and paid for. Whatsapp was paid for when other chat was free or included in your contract. There are many business models and ways to grow. It's hard, but I think you could bootstrap a Facebook replacement... over a very long time!

dragonsh 6y ago

For people tired of scrolling Twitter thread here is the link in blog format. https://mythreadreader.com/awilkinson/1376985854229504007 https://mythreadreader.com/awilkinson/1376985854229504007

eptcyka 6y ago
Reading the same text on twitter is unbearable.

deleted 6y ago

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polote 6y ago

This is a pretty hypocrite thread. The guy is successful, has a lot of money. He starts a company thinking that because he has the best product he is going to win the market. Things don't go as planned. Blame the VC and competitors for it. First, his company was VC founded. He poured 10M in the company that's very close to having raised 10M Second, you dont go out of business because someone created a competing offers Last, he his a successful guy, it is difficult to go openly on Twitter and says "I failed because we were not good enough" it is easier to follow the trend of our time saying that VC is evil.

erwinh 6y ago
I read it as a pretty reflective thread of him admitting he was multiple strategic steps behind Asana at pretty much every stage of growth because of his own ignorance about where VC money can actually be useful.
brayhite 6y ago
Hm, my conclusion of the thread was less “VC is evil” and more like “We underestimated the impact VC had and overestimated the impact “organic growth” would have for us.” What’s hypocritical about that?

jcpham2 6y ago

5 tweets deep it hits you with the signup or login to read and then it’s tab over

aogaili 6y ago

Since neither Flow nor Asana are innovative ideas for a startup, they basically ended up competing in a zero-sum game trying to out spend each other in marketing and features. That is why innovation and finding a niche with loyal users are key ingredients for startups. But in SV, you can keep pumping money onto a mediocre ideas/products round after round and increase it's valuation. Basically drying out the competition (our author in this case) and pushing their products down the market throat using sheer force powered by marketing and developers VC supplied capital.

devops000 6y ago

You are comparing your profit versus Asana revenue. After all these years, does Asana is profitable? If it doesn't I think they didn't win either. You both have lose.

gregoire 6y ago

This thread is missing a link to the actual product, so here it is: https://www.getflow.com/ https://www.getflow.com/ They launched a new version last fall: https://www.getflow.com/blog/flow-x-is-launching-in-september https://www.getflow.com/blog/flow-x-is-launching-in-septembe...

syspec 6y ago
Wow it actually looks really nice, if this came out today it would be a hit... but because it has been around for a while it it has the sheen of being boring on it. Otherwise I cannot tell why it is not more succrsssful

madengr 6y ago

Is all this (for both companies) for a damned task listing app? I can do the same with a paper and pencil.

zcw100 6y ago

Once you get past the David vs Goliath ethos, we are left with "I had invested millions of dollars, without even realizing it" and "my CFO was freaking out" was a big part of the problem. What was omitted was, "and I didn't listen to any of them". I also liked how everyone else was drinking the cool-aid but thinking you're going to make a billion dollars on your to-do app isn't.

pabe 6y ago

This in an incredibly valuable Twitter thread. As an entrepreneur, you have to decide very carefully about the market you want to conquer. Or, in the words of Sun Tzu: "If a battle can't be won, don't fight it." - For companies backed by big VCs, money basically does not exist. They can spend ten dollars to earn one as long as the story of building a leading brand can be told. Vanity metrics play an important role here. The primary target is to go public to cash out. There is _no way_ winning against such a player if you're not backed the same way.

lbriner 6y ago

The things about SaaS is that it is as easy to do for others as it is for us. So if we think that something was sort of easy to build and get loads of money for, then competition is inevitable. There are a few ways to survive the competition: 1) Do something that you have special experience or skills in so that not so many people could copy it if they wanted to. Maybe you know lots about the financial markets or aerospace. 2) Go into a specific market that the General Practioners (especially the Unicorns) are less likely to target. For example, UK Healthcare or German Finance, which could be super-targetted at the niche and provide a lot of value for money, even over a relatively small number of customers. Some finance software houses only have double-digit customer numbers but very high markups. 3) In some cases, solve a problem in a novel way that once people get hooked into it, they cannot directly compare you to the competition. If it looks just like a t-card task system, it is easy to compare. If you give the entities different names and have a workflow that solves the problem in a roundabout way, maybe people won't know that they could swap to Asana. 4) Add lots of integrations and make it really sticky with people's other systems. Many customers today will literally choose a supplier based on whether they offer a Salesforce integration or not (even if it doesn't make logical sense for your product!) 5) If you really want to go big, you have to go early, well and fast! AOL and Yahoo might have gone early but not necessarily well or fast. AirBnB went early, fairly well and fast. It sounds like Flow did not necessarily go very early, went fairly well but could not go fast enough.

plehoux 6y ago

We're in a competitive SAAS market, raised no money, don't do marketing, work exclusively on the product, and offer good customer support. Our competitors raised > 100 million dollars, and daily we get customers from them. And we are not named Jason or DHH; our blog posts usually get 100 views... We just reached $1M in ARR. Yes, it is all possible; their problem is they tried to compete directly on the same terms, you can't outspend a VC-backed business.

j4yav 6y ago
Have you written about your early days? I’d love to hear more. I’m at the very beginning of what I hope is a similar journey with my side project.

lee 6y ago

One aspect of bootstrapping I imagine is the "fail-fast" principle. If you can't compete while spending less than your revenue you should take it as a sign that your current business is not "boot-strappable". Doesn't sound like he bootstrapped.

rory_h_r 6y ago

That $10M wasn't wasted for me as an Asana/Jira user because they forced Asana and Jira to get better.

canadianfella 6y ago

Learnt is a weird word.

rkagerer 6y ago

The best product doesn’t always win, and product is not a longterm competitive advantage. I have trouble swallowing this one. He decided to compete on product, but instead spent more of their limited resources on other things. We started burning money on ads and hiring sales people In order to stay competitive, we had underinvested in our engineering team due to cash constraints and stretched them across mobile, desktop, and web. We started to get an endless stream of bug reports from our customers. Our clients were unreliable and had syncing issues This smells to me like neglected product and over-stretched developers. Chasing new features instead of building solid foundations by selecting the most important ones and getting them right first. As a customer, as soon as I see something like "sync issues" that's a dealbreaker. If I can't trust your product to keep my data safe, I'll stop using it. It does look like they eventually figured that out: We had to hit pause and spend years — literally years — rewriting all of our clients But by then the competition had decisively out-producted them: One day recently, I looked at Asana and it slapped me in the face: It’s better.

arminiusreturns 6y ago
I hate seeing this very thing play out in real time, but I find it particularly sad when investors and VCs then takeover the board and outmaneuver the founders and Csuite to the point they barely run the company anymore. They take advantage of technical founders without the board level chops to do this. Then short term focus or otherwise misaligned incentives mean the board slowly, but unknowingly, runs the company into the ground. (by doing stuff like hiring a bunch of marketing people while the technical debt starts piling sky high...)
r0fl 6y ago
Completely agree! The best product does always win. The founder did not focus on making the product better but jumped from marketing to design, to raising money, to expanding the team. The product did not keep getting better and they lost. 1. If you are in a competitive VC-funded space, it’s foolish to compete without raising money. Don't bring a knife to a gun fight. Again, not true. You win if your product is better. Think outside the box, and make something that no one else has made and users will love it and you will win. I'm not saying that is easy to do. Just that's what wins.

hartator 6y ago

> burning over $150,000 per month ... Flow did about $3MM of ARR How did they run out of money? Something doesn't add up.

bb611 6y ago
Presumably paying salaries, hosting/hardware, and he specifically calls out marketing costs.
mattm 6y ago
I think burning here means losing $150k per month. So they had $400k in monthly expenses.

yoyonamite 6y ago

One thing 37Signals is very good at is limiting the scope of what they're trying to accomplish and market those limitations as a strength. Instead of doing that, it sounds like they tried to compete directly on features against competition that could outspend them.

ben7799 6y ago

I had this pop up in my twitter feed independently. When I went to go look at it's basically a lite version of something like Jira. Far less featured, maybe not targetted as much at software development. In competitive sales analyses (easy to find) it completely loses... far less features, integration, etc.. and yet quite a bit more expensive. It's base starting price is quite expensive compared to the competition (not just vs Jira). It seems like the product had a lot of things they could have done to improve it and they just didn't execute very well. It's a weird product area.. I kind of hate Jira, but I also kind of hate every other project management software I've ever used. It seems like they came at it from the "we're expert UI/designer" types as opposed to project management/development experts. Maybe they cut down their features and kept it too simple out of a sense of design purity. It also sounds like he had success in other areas that were easier and didn't stress his business management skills, but this product did and he didn't listen to his business partners or seek out better managers to help make the right decision. Perhaps he was blinded by his previous success. It's an interesting read. As an engineer I would have been very very skeptical to join a team working in this area because my gut feeling would just be bad due to how many products have failed or been mediocre in this product space.

sjg007 6y ago
>competitive sales analyses (easy to find) it completely loses. Could you please share? I wasn't able to find anything.
- ben7799 6y ago
  Just search "Jira vs Flow" or "Jira vs Asana" or "Flow vs Asana" and you will find a bunch of sites showing competitive breakdowns. Flow looks way more tailored towards simple SMBs that you would think would have trouble dealing with something like Jira. But Jira starts with a Free tier for < 10 users and the next level up is $7/month/user. Flow starts at $53/month for 6 users. With far fewer features. The next tier is just "only by quote". Flow is the least featured but it's starting price point seems to be the most expensive.
skeeter2020 6y ago

coltons 6y ago

I want to point out that Asana CEO meeting OP for coffee and basically starting a competition is one of the healthiest and most amazing things I have ever read/heard about. The market was a game. Amazing, and something you only read about happening in startup land.

PaywallBuster 6y ago

1. Don't compete with deep pocketed VCs. 2. Keep costs minimal, offshore if required.

offsky 6y ago

As the founder of Toodledo this really resonated with me. When I launched my todo site it was just me and Remember the Milk. I had one of the first iOS todo apps in the store and I rode that wave. Grew to 7 employees. Then came Reminders and Flow and Asana and Wonderlist and Things and Todoist and ...

Terretta 6y ago
But you were the one with the pluggable API if I recall, and so able to work across platforms and with other apps, while also being rich enough to implement a “GTD” type system. I could tie a number of things to you, making me a happy subscriber! Thinking back, I think the thing that eventually pushed a shift was not the ones you mention, but Trello, thanks to Kanban w/ card flipping mechanic, along with “team” boards w/ permissions.

motohagiography 6y ago

That thread made it click for me what his, my own, and other company problems were. We usually don't know why a product is a product, because acknowledging it would make its effect disappear. Thank you, I get this perfectly now.

waylandsmithers 6y ago

What is implied but not specifically stated in his lessons learned is that selling your time while also selling a product is VERY difficult to pull off. Fried/DHH eventually turned into a product company to focus solely on Basecamp, and I think the Ruby on Rails thing also makes their case entirely off the table for basis of comparison for why your consulting business could generate some quick and easy extra cash from a saas product build by the billable employees on the bench.

pahbloo 6y ago

Reply from DHH: https://world.hey.com/dhh/it-s-hard-to-draw-lessons-from-your-own-failures-d4608094 https://world.hey.com/dhh/it-s-hard-to-draw-lessons-from-you...