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Harsh Realities From 500 Startups Founders

131 points by DanielRibeiro 15y ago

badclient 15y ago
You will LOSE all of your money that you ever earned, and then a bunch that you still have not earned. If you’re not prepared to put it all on the line, you’re not prepared for a start-up. Terrible assumption at best, a lie at worst. Putting everything on the line is not the only way to do a start-up that's successful.
- choffstein 15y ago
  I could not agree more. It's an irresponsible statement and should only be qualified by those entrepreneurs talking about how much money they started with. Though, having been to 500Startups and seeing the amount of 20-somethings there, I can't imagine they had much to lose in the first place. I don't see why this lie of having to put everything on the line is consistently perpetuated within the start-up ecosystem. Yes, start-ups are hard -- but I am getting tired of what seems like a consistently perpetuated lie so that start-ups can feed their own ego -- or worse, justify their failure.
- devmach 15y ago
  Why people such obsessed with running business like playing poker ? If you're puting your everything on the line, i think you are doing something wrong. What's hard with starting small, taking small risks and growing slow but steady ? Starting a business shouldn't be about going crazy, acting like a fool, putting everthing you have on the line and at the end loosing everything. People please, while you are at the university ,please, visit some (m)ba lesssons. If you don't have this chance, take advices from someone who you trust and runs a business.
- loceng 15y ago
  I have to assume it's based on having experience or not. If you don't have experience and had the opportunity to make mistakes then you have to make those mistakes, and they will have cost to them.
- tlogan 15y ago
  Actually - "Putting everything on the line" is the only way to get successful business. Before the Silly Valley become synonym for a startup/business, whoever wanted to be entrepreneur needed to invest a lot of his/her money to start a business. For example, think about running a "simple" limo service - that requires a lot of investment. In other words, you cannot assume that you will run startup and if it fails you will have great living like nothing happen. At least in software business you can easily find a job and start saving again. Also startup is "marathon" and not "sprint" but word "marathon" does not mean you run slow - it only means it takes forever :)
deleted 15y ago
[deleted]
maeon3 15y ago
Putting everything on the line can focus you like never before. But if you fail, you may never get a chance to do another startup with a bankruptcy on your record and having to get an employee job for a decade. Put up the money for the startup that is the extra from what you need to get by. Throw in your 401k and every penny you own as well as money you don't have, and you are risking living in the house of pain for 20 years trying to service it with an employee job as a desparate man. Have a startup "complete failure" plan because odds are you will have to use it.
- j45 15y ago
  If a startup is meant to become a business that makes money, does it really have to be all-in poker? Is there no way to make money as you go? Sooner or later it has to be figured out, no?
ryanwaggoner 15y ago
In 2009 I started a company with another guy, and I used to read articles like this, about how startups are so very difficult, and how you have to put everything on the line, your health, your wealth, your relationships, everything. It's a very common theme in startup-land, and I constantly hear from founders who sacrificed their marriages, worked 19 hour days, slept under their desks, and racked up tens of thousands in credit card debt, all to make their dream a reality. The message is very clear: you have to be willing to do anything to succeed. Articles like this fed my ego, and made me feel like I was part of an elite cadre of founders. Then my startup failed, leaving myself and my cofounder with tens of thousands in debt and a pretty rough mess to clean up. In the meantime, a good friend of mine who started a little project on the side slowly grew it over a period of a couple years into something that supports his family very well and has a good shot at doing millions in revenue within the next 5-10 years. And I don't think he's been very stressed while doing it. He loves what he does, has tons of time for his family, etc. The cynical among us might term this a "lifestyle business" and they'd be right. But I don't think that bothers him and I can't say I blame him. There's this really ugly side of the startup world that drives founders to completely unreasonable levels in pursuit of fast wealth creation, and it comes as a result of two factors: founders are naturally ambitious, driven people, and investors are in a hit-driven business. So the result is that investors naturally gravitate towards founders who either hit a billion dollars in a few years, or die trying (sometimes literally), and then investors and founders both are incentivized to craft this story that they only way to win is to win big, fast, and with all your chips on the line. And these things become self-reinforcing, so you have investors talking about how the real reason startups are so valuable is that founders can work so hard that they accomplish a career's worth of work in just a few years. The message is clear: you need to work 90 hours a week and either be the next Dropbox or flame out. And for the model most investors work under, that's the only way they really make money. But the more I look around, the more I wonder if there's really much correlation between blowing your life up and startup success. Yes, you hear a lot of successful founders talking about how they killed themselves to get there. But thanks to survivorship bias, you don't hear from all the ones who risked everything, turned their lives and relationships and health upside down, and then lost. And increasingly, I'm seeing a lot of examples of very successful founders who definitely work hard, but keep an eye on themselves, their health, their relationships, etc. and have lines they're just not willing to cross. 37signals is the classic example here, but there are scores of others, many of them right here on HN. The key seems to be patience and humility, two things a lot of 20-something founders (including myself) have in very short supply Maybe startups are so hard because we're doing them wrong.
vbtemp 15y ago
Now this is hacker news (sorry, I've been fed up with some of the other posts recently that have nothing to do with software startups). Thanks for posting.
- derwiki 15y ago
  Makes me miss Hacker Hacker News
j45 15y ago
I've been full time, self employed for 12+ years, starting when 2 years into university. In that time I've started up several businesses. Freelancing, contracting, consulting, products. Some have gone further than others. Some had business model limitations (finding people), others had limitations of my interest. One thing: All made money. Why? I was too young to get credit. The only way I got to do what I loved was to find a way for it to make money, sustainably. 12 years later, what do I have to show? Money made. Money spent. Worked hard. Lived Hard. Partied hard. There was no middle, only extremes. In getting there, I starved and managed my last x dollars more times than I count. Little by little, I rid myself of desire for almost all material, social and other desires. What hurts me to say the most is this. This suffering was avoidable in many ways looking back. Software startups have two main challenges. First learning business in general, and two, learning what they are made of as people. The only thing I needed to develop in my self is maintaining a high work ethic (avoiding burnout) and developing a focused pursuit of finding and doing the right things. That doesn't require playing all-in hold em poker with your life. Here's the thing: The act of building a business that doesn't make money itself, seems to me, to be a violation of what a business is meant to do -- make money. If we as creative, creating, innovators expect to sustainably create for a long time, we have to do this for the long haul. Right now, the culture seems to be give it your all or get out of the way. The best financial successes rarely have done it like this, though. Apple bootstrapped. Microsoft bootstrapped. If I have to love what I do, I have to spend time enjoying it and loving it. Being absorbed to the point where my body, energy, relationships all suffer is akin to saying I'll hold my breath long enough until I reach other side of the pool while under water. How many drown, how many don't? How much innovative energy and people have been sacrificed to find the fraction of a fraction? How much innovation has been lost where it's needed? Here's my challenge, can we lay down our egos, our need for glory and making a success "worth it all", to start solving problems that pay for our time to give us the real freedom to pursue the big ideas without suffering? For me, the quality of my relationships is my wealth. I became broke because of startups. No time, making, or creating memories. Now I'm taking it back and launching a few ideas a year as products. They make money, growing slowly. I know the idea that I'm to give my all to will come on my path as long as I keep my work ethic up, keep a focused pursuit of recognizing what I need. Until then, living for a living is as important as startups.
csomar 15y ago
You are doing it wrong. I started my business 4 years ago, while being a full-time student. Only this year I have decided to drop from University to test the waters. I made during the last 4 years enough to survive for 1 year (rent+food+internet), setup my desk, register my company and hire an accountant, and buy some cool stuff (smartphone, watch, tablet...) Looking back and connecting the dots, if I have decided to take on my business full-time 4 years ago and be financially independent, I'll be a total fail. There is a hell lot of things that I learnt during this 4 years that can't be learnt just in few months. Start your business in the side to learn the clues. Get a few clients and make some profit. Save at least a full year expenses. Go full time and work 40/45 hours a week while reading stuff and HN in the remaining of the time. This is actually hard work.
laironald 15y ago
I've worked on a few projects over the years and finally had one that I was proud to call a startup. We got into a top incubator program and busted our butts for a really long time. We had a set of willing investors, a rock solid MVP evolving to a real product and a launch event that was the talk of the town. We did everything right, asked good questions and were personable as hell. And in the end, I departed from the venture due to team fit issues. No matter how much I want to point fingers, I know I was also another source of the problems. I guess what I learned from this situation is -- deal with your shit early. I knew there were problems, but our team swept these issues under the "I'm going to work hard and sleep on the floor" rug and by the time we were ready to talk about them, they were at an unforgivable stage. Startups are intense and I was OK with that.. but the minute I stopped having fun, I stopped being productive. I also started to sacrifice my own activities to make the startup work and when I eventually did get burned out, I was feeling pretty bummed overall. A better balance and celebrating more team wins could have definitely helped.

131 points by DanielRibeiro 15y ago

You will LOSE all of your money that you ever earned, and then a bunch that you still have not earned. If you’re not prepared to put it all on the line, you’re not prepared for a start-up. Terrible assumption at best, a lie at worst. Putting everything on the line is not the only way to do a start-up that's successful.

choffstein 15y ago
I could not agree more. It's an irresponsible statement and should only be qualified by those entrepreneurs talking about how much money they started with. Though, having been to 500Startups and seeing the amount of 20-somethings there, I can't imagine they had much to lose in the first place. I don't see why this lie of having to put everything on the line is consistently perpetuated within the start-up ecosystem. Yes, start-ups are hard -- but I am getting tired of what seems like a consistently perpetuated lie so that start-ups can feed their own ego -- or worse, justify their failure.
devmach 15y ago
Why people such obsessed with running business like playing poker ? If you're puting your everything on the line, i think you are doing something wrong. What's hard with starting small, taking small risks and growing slow but steady ? Starting a business shouldn't be about going crazy, acting like a fool, putting everthing you have on the line and at the end loosing everything. People please, while you are at the university ,please, visit some (m)ba lesssons. If you don't have this chance, take advices from someone who you trust and runs a business.
loceng 15y ago
I have to assume it's based on having experience or not. If you don't have experience and had the opportunity to make mistakes then you have to make those mistakes, and they will have cost to them.
tlogan 15y ago
Actually - "Putting everything on the line" is the only way to get successful business. Before the Silly Valley become synonym for a startup/business, whoever wanted to be entrepreneur needed to invest a lot of his/her money to start a business. For example, think about running a "simple" limo service - that requires a lot of investment. In other words, you cannot assume that you will run startup and if it fails you will have great living like nothing happen. At least in software business you can easily find a job and start saving again. Also startup is "marathon" and not "sprint" but word "marathon" does not mean you run slow - it only means it takes forever :)

deleted 15y ago

[deleted]

maeon3 15y ago

Putting everything on the line can focus you like never before. But if you fail, you may never get a chance to do another startup with a bankruptcy on your record and having to get an employee job for a decade. Put up the money for the startup that is the extra from what you need to get by. Throw in your 401k and every penny you own as well as money you don't have, and you are risking living in the house of pain for 20 years trying to service it with an employee job as a desparate man. Have a startup "complete failure" plan because odds are you will have to use it.

j45 15y ago
If a startup is meant to become a business that makes money, does it really have to be all-in poker? Is there no way to make money as you go? Sooner or later it has to be figured out, no?

ryanwaggoner 15y ago

In 2009 I started a company with another guy, and I used to read articles like this, about how startups are so very difficult, and how you have to put everything on the line, your health, your wealth, your relationships, everything. It's a very common theme in startup-land, and I constantly hear from founders who sacrificed their marriages, worked 19 hour days, slept under their desks, and racked up tens of thousands in credit card debt, all to make their dream a reality. The message is very clear: you have to be willing to do anything to succeed. Articles like this fed my ego, and made me feel like I was part of an elite cadre of founders. Then my startup failed, leaving myself and my cofounder with tens of thousands in debt and a pretty rough mess to clean up. In the meantime, a good friend of mine who started a little project on the side slowly grew it over a period of a couple years into something that supports his family very well and has a good shot at doing millions in revenue within the next 5-10 years. And I don't think he's been very stressed while doing it. He loves what he does, has tons of time for his family, etc. The cynical among us might term this a "lifestyle business" and they'd be right. But I don't think that bothers him and I can't say I blame him. There's this really ugly side of the startup world that drives founders to completely unreasonable levels in pursuit of fast wealth creation, and it comes as a result of two factors: founders are naturally ambitious, driven people, and investors are in a hit-driven business. So the result is that investors naturally gravitate towards founders who either hit a billion dollars in a few years, or die trying (sometimes literally), and then investors and founders both are incentivized to craft this story that they only way to win is to win big, fast, and with all your chips on the line. And these things become self-reinforcing, so you have investors talking about how the real reason startups are so valuable is that founders can work so hard that they accomplish a career's worth of work in just a few years. The message is clear: you need to work 90 hours a week and either be the next Dropbox or flame out. And for the model most investors work under, that's the only way they really make money. But the more I look around, the more I wonder if there's really much correlation between blowing your life up and startup success. Yes, you hear a lot of successful founders talking about how they killed themselves to get there. But thanks to survivorship bias, you don't hear from all the ones who risked everything, turned their lives and relationships and health upside down, and then lost. And increasingly, I'm seeing a lot of examples of very successful founders who definitely work hard, but keep an eye on themselves, their health, their relationships, etc. and have lines they're just not willing to cross. 37signals is the classic example here, but there are scores of others, many of them right here on HN. The key seems to be patience and humility, two things a lot of 20-something founders (including myself) have in very short supply Maybe startups are so hard because we're doing them wrong.

vbtemp 15y ago

Now this is hacker news (sorry, I've been fed up with some of the other posts recently that have nothing to do with software startups). Thanks for posting.

derwiki 15y ago
Makes me miss Hacker Hacker News

j45 15y ago

I've been full time, self employed for 12+ years, starting when 2 years into university. In that time I've started up several businesses. Freelancing, contracting, consulting, products. Some have gone further than others. Some had business model limitations (finding people), others had limitations of my interest. One thing: All made money. Why? I was too young to get credit. The only way I got to do what I loved was to find a way for it to make money, sustainably. 12 years later, what do I have to show? Money made. Money spent. Worked hard. Lived Hard. Partied hard. There was no middle, only extremes. In getting there, I starved and managed my last x dollars more times than I count. Little by little, I rid myself of desire for almost all material, social and other desires. What hurts me to say the most is this. This suffering was avoidable in many ways looking back. Software startups have two main challenges. First learning business in general, and two, learning what they are made of as people. The only thing I needed to develop in my self is maintaining a high work ethic (avoiding burnout) and developing a focused pursuit of finding and doing the right things. That doesn't require playing all-in hold em poker with your life. Here's the thing: The act of building a business that doesn't make money itself, seems to me, to be a violation of what a business is meant to do -- make money. If we as creative, creating, innovators expect to sustainably create for a long time, we have to do this for the long haul. Right now, the culture seems to be give it your all or get out of the way. The best financial successes rarely have done it like this, though. Apple bootstrapped. Microsoft bootstrapped. If I have to love what I do, I have to spend time enjoying it and loving it. Being absorbed to the point where my body, energy, relationships all suffer is akin to saying I'll hold my breath long enough until I reach other side of the pool while under water. How many drown, how many don't? How much innovative energy and people have been sacrificed to find the fraction of a fraction? How much innovation has been lost where it's needed? Here's my challenge, can we lay down our egos, our need for glory and making a success "worth it all", to start solving problems that pay for our time to give us the real freedom to pursue the big ideas without suffering? For me, the quality of my relationships is my wealth. I became broke because of startups. No time, making, or creating memories. Now I'm taking it back and launching a few ideas a year as products. They make money, growing slowly. I know the idea that I'm to give my all to will come on my path as long as I keep my work ethic up, keep a focused pursuit of recognizing what I need. Until then, living for a living is as important as startups.

csomar 15y ago

You are doing it wrong. I started my business 4 years ago, while being a full-time student. Only this year I have decided to drop from University to test the waters. I made during the last 4 years enough to survive for 1 year (rent+food+internet), setup my desk, register my company and hire an accountant, and buy some cool stuff (smartphone, watch, tablet...) Looking back and connecting the dots, if I have decided to take on my business full-time 4 years ago and be financially independent, I'll be a total fail. There is a hell lot of things that I learnt during this 4 years that can't be learnt just in few months. Start your business in the side to learn the clues. Get a few clients and make some profit. Save at least a full year expenses. Go full time and work 40/45 hours a week while reading stuff and HN in the remaining of the time. This is actually hard work.

laironald 15y ago

I've worked on a few projects over the years and finally had one that I was proud to call a startup. We got into a top incubator program and busted our butts for a really long time. We had a set of willing investors, a rock solid MVP evolving to a real product and a launch event that was the talk of the town. We did everything right, asked good questions and were personable as hell. And in the end, I departed from the venture due to team fit issues. No matter how much I want to point fingers, I know I was also another source of the problems. I guess what I learned from this situation is -- deal with your shit early. I knew there were problems, but our team swept these issues under the "I'm going to work hard and sleep on the floor" rug and by the time we were ready to talk about them, they were at an unforgivable stage. Startups are intense and I was OK with that.. but the minute I stopped having fun, I stopped being productive. I also started to sacrifice my own activities to make the startup work and when I eventually did get burned out, I was feeling pretty bummed overall. A better balance and celebrating more team wins could have definitely helped.