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Ask HN: What made your startup fail?

• chrismsimpson 4y ago
  Google getting in the space just as another raise was in train as well as a problem domain that required fast, asynchronous and low latency communication but was written in unoptimised single threaded Ruby.
• bfrog 4y ago
  People disagreeing within the company on sensible comp killed one, a failure to target a large enough market for another, and finally another disagreement on direction where I left. Arguably the last startup I was in hasn’t failed but… it’s not really growing from my purview either, they failed to entice the IC employees to stay with stock or sensible bonus payouts. Almost everyone not a “vp” left. Were I to go for another startup I’d start it myself, start small with minimal time investment and throw the line in the water for paying customers. Basically I’d do it solo I think. With a product I know I’d personally want to pay for and use.
  • codybontecou 4y ago
    What's stopping you from pursuing your own startup?
• muro 4y ago
  I worked at a startup making a (ps3 and xbox360) AAA game. It was bought up by a company specializing in buying multiple smaller game companies and then taking investment from larger investors. It would use the money for another small company, increased the valuation and do another investment round. At some point, it all collapsed, the owner going to jail. If it didn't collapse due to financial mismanagement, we would fail due to our own incompetence :)
  • ecshafer 4y ago
    isn't the cost of a AAA game too high for a startup without solid financial backing from a publisher anyways?
    • muro 4y ago
      Yes. The point above still stands :)
• electric_mayhem 4y ago
  Speculative infra investment certainly didn’t help. But I finally gave up because too many clients had a bottomless appetite for services and seemingly limitless capacity to ignore contractual payment terms.
• buro9 4y ago
  Built a great product, but didn't focus on selling it. Essentially stayed in my comfort zone of engineering and product, rather than going out of my comfort zone of sales.
  • er4hn 4y ago
    Same mistake that I made. Should have been focusing on my weak points from day 1.
  • mikesabat 4y ago
    This is why my startup failed. I will add to this, that when I conceived and built the product myself (with dev help of course) I took product shortcomings more personally. It's always a delicate balance between finding customers that will buy the existing product vs. taking the roadmap suggestions from potential customers. If you are managing the product and the sales there is also emotion/pride involved. Probably a good reason to have different people focused on sales and product.
  • joshxyz 4y ago
    Same shit, all my previous attempts were failed due to lack of my awareness on how important sales is. Current one is going better since i learned sales.
• berkes 4y ago
  Obvious. But not mentioned yet: lack of product/market fit. In another case: local government imposing a regulation scheme on crypto-related projects that we couldn't meet. Not because we did scetchy stuff, but because the regulation scheme required rediculous budgets, corporate setup (specialized risk and compliance departments and officers and all etc) all on a startup that was running under €3000/month.
• destitude 4y ago
  Non-technical management making technical decisions and too much management.
• barbarr 4y ago
  We built and then tried to find a market, rather than the other way around.
• jmtulloss 4y ago
  I stopped working on it
  • Lacerda69 4y ago
    what was it?
• adastra22 4y ago
  Founder infighting. Thinking that if we built the best technical product, the customers would naturally come to us.
• pkoird 4y ago
  I think at the end of it it's primarily always the same reason: didn't have customers.
  • margorczynski 4y ago
    I would agree but there's almost always a root cause for that - bad marketing, sales or simply not grasping the market needs and or simply ignoring the fact that there's no market need for what you're building (simply no interest or maybe already entrenched competition where you do not offer nothing unique to sway their client base)
• onion2k 4y ago
  That's an easy one - we didn't go to market early enough and couldn't get customers because we tried to build the perfect product. My co-founder and I raised a decent series A off the back of a good demo, and then we spent 18 months trying to build the product we wanted to solve the pain we had (managing requirements in medium projects). We coded for about 14 months of our 18 month runway, and when we eventually talked to customers they were reluctant to risk projects on a new management app. It really could be a textbook example of getting everything wrong in a startup. It was a lot of fun though.
  • jokethrowaway 4y ago
    Damn, I'm thinking of starting to work on something similar. I made a prototype 15 years ago during a software engineering project at uni and I've been shocked to see how crappy requirements management is in the real world compared to my toy project. The pain is definitely there: people in the companies are chasing 5 years old documents, engineers are wondering what's a bug and what's a feature and who the hell approved what. While I don't think it's unicorn material, I think I can convince some PMs to get approval for a 50-100$ monthly spend on the company credit card.
    • onion2k 4y ago
      I still believe it's an app that people need. The problem is entirely that no one actually wants to admit they need it, or spend time populating the app, or risk what might happen if the app doesn't solve the problem. Those are huge barriers to overcome. Building the app is actually quite straightforward. Getting people to use it is the hard part.
• monero-xmr 4y ago
  I joined this startup during the 2015 AI bull run that was doing chat bot for transportation - you talk to a chat bot and it would order you flights, hotels, rental cars, etc. Side note - what’s so funny about the current buzz around ChatGPT is that everyone is forgetting that tons of companies were funded to create chat AI interfaces backed in 2014-2016 and all of them went nowhere! A lot of it was kicked off by Zuck announcing that FB Messenger would be the future of e-commerce which threw fuel on the fire. But I digress. https://techcrunch.com/2016/04/12/agents-on-messenger/amp/ https://techcrunch.com/2016/04/12/agents-on-messenger/amp/ The company raised huge money, like $100 million in a few quick rounds, despite no revenue and few users. The product launched, no one liked it, then everyone just fucked around all day for like 5 years until it was acquired for no money. I left after 12 months because it was a joke despite “big names in AI” working there and a semi-famous co-founder. What became very obvious was that an imperfect chat robot was a terrible way to book something as essential as flights and hotels. Eventually it became a self-automated flow where the chat bot was basically a flow chart, and then eventually that was abandoned and it became a clone of all the travel booking websites and apps. I would be very, very leery of AI right now - I lived this story before and you’d be amazed at how efficient a few button clicks are vs. trying to explain exactly what you want to a robot. Finding paying customers is an open question even for the biggest names. AI seems more like a feature than a product to me, but time will tell I suppose.
  • unraveller 4y ago
    it's different this time, this time the user knows they want a chat interface to start.
    • nitwit005 4y ago
      The customers for chatbots were often support companies already doing web chat. They wanted a chat interface, as did their customers. The bots just didn't perform well enough.
    • yumraj 4y ago
      Sarcasm ?
  • 4y ago
• _448 4y ago
  I don't have a startup. But I have seen and heard that most startups fail due to cashflow problems. Fun info, just yesterday I came across the term "cockroach startup" something like "unicorn startup". Cockroach startups are those that survive and thrive financially no matter what the economic conditions are. And they do that by being conservative with their expenses and manage their cashflow very well.
  • rahimnathwani 4y ago
    "most startups fail due to cashflow problems" That's equivalent to "most people die because they stop breathing".
• jokethrowaway 4y ago
  We never managed to sell it to a lot of people. We were selling direct, even door to door at some point. Cost of acquiring a new customer was too high and bringing in very little. Our investors contacts turned out to be pretty bad and just wasted our time with unrelated mini projects (some of which they didn't pay) and we never managed to sell them the actual product. In hindsight we had to figure out a different sales pipeline eg. try to offer a revenue shares to other actors in the market who had access to our target market. We built a nice product for the time and one of the biggest companies in the world bought one of our competitor which was very very similar. The timing was ok, the product was there, we lacked in sales.
• didip 4y ago
  It was making money, but it was a slow burn. Customer acquisition is too expensive and the average restaurateurs did not understand technology. Now, 12 years later... I saw what I built done by others on every restaurant. We were simply way too early.
  • margorczynski 4y ago
    Thanks for sharing. I think in investment there's a saying "being too early is no different than being wrong" - people don't understand that aside from having a great product if the timing is wrong it won't work.
  • nitwit005 4y ago
    I wouldn't assume all those apps in restaurants are making money. As you said, cost of acquiring customers is high, and the restaurants have multiple options now.
  • Lacerda69 4y ago
    can you share what it was? order food apps? shift planning app?
• anotheraccount9 4y ago
  My angels were part of a questionable group. I checked with the RCMP (that was in the 90s), and, without giving much details, they strongly suggested I leave the group. I was hardly making any money at the time and was working like a horse. When I announced I was leaving, my investors offered me $300000 right away, no question asked. I left anyway, as the atmosphere was already strange and toxic. No regrets, as I was also burned-out. Edit: I was very young, inexperienced, and was literally learning on the go. Totally set to fail.
• ucm_edge 4y ago
  Insufficient profit. Had a startup based around an depreciating asset that we held and rented out. Costs recovered in three years and then two years of profits before asset was sold for the last bit of money. We were profitable on each individual asset we had to the tune of about 6.5% return after five years. Not profitable as a company though. Costs were fixed though (about 80 people in an office) so if we could have gotten more capital to buy more assets we would have become profitable. No one wanted to wait five years to get l 6.5% back in the midst of a bull market. So we failed to raise and died.
• marssaxman 4y ago
  I did too much engineering and not enough management, and we never managed to ship the damn thing. Also, I have learned that I hate thinking about money, and would rather just give things away for free; if I would have to create a business around an idea to make it happen, that's a good sign that I should find a better way to spend my time.
• abadger9 4y ago
  I have a (currently inactive) consulting company that was clearing 40% above my senior software engineering salary in the sf bay area. Eventually the stress of getting a company's treasury dept's to pay on time to cover my contractors and I induced so my stress that I developed GERD (also known as heart burn). The money was great, and I was single at the time so I had a lot of great experiences with the extra cash. The company is inactive now but I still own it and get requests from clients a few times a year, I'm pretty busy with married life now though I would probably do it again full time in the future and sell it off to a big 4 consulting firm (which is what a family friend of ours did for $XX million).
  • syndacks 4y ago
    Hi, any interest in working with someone on this to help the parts that stressed you out?
• chewxy 4y ago
  TLDR: ran out of runway, stakeholders from clients moving on all at the same time. Longer story: I ran a startup that did natural language data analysis (kinda like what people are trying to do now with ChatGPT). You could ask it a question (via email or command line) and it would return its analysis. It could do a variety of statistical analysis and could explain the results in words (tho not as well as a finetuned ChatGPT could do today). Technically it was strong. And I'd say way ahead of the curve. A few things caused the failure: 1. Spending too much time keeping one potential cash cow instead of finding more clients. Having failed a few prior startups, we (cofounders) were obsessed with getting and more importantly keeping clients. This led us to build integrations for clients. One integration was particularly absurd: the "database" that they wanted to connect to is a PowerPoint file on a SharePoint server. Specifically the tables on particular slides. We spent way too much time building custom integrations 2. Running costs were too high. We had developed a sorta "staggered on-line" training scheme. Each client had its own model. Monthly costs per client reached $2000 per month. But with one of the clients we absorbed the costs because they were a potential cashcow (same client as above) 3. The main stakeholder at this potential cashcow left the company to found his own startup, leaving no one else to advocate for my product. At the same time the two other clients decided it was way too expensive to having not enough of an impact on the business. Thus, we ran out of money. Good news is that Gorgonia (https://github.com/Gorgonia https://github.com/Gorgonia) was born from this. I'm still working on the framework for deep learning today
• satya71 4y ago
  Selling to people without ability to pay. Not solving a big enough pain.
• throwawaywu 4y ago
  I'm so comfortable with an ok income from the current business that I haven't started the startup I know in my heart would be wildly successful.
• Daz1 4y ago
  Vandalism and high operating costs eroded the extremely slim profit margins that only existed in the most favourable of real-world usage scenarios. Also competition from publicly-traded entities with cash to throw at problems we couldn't afford to risk investing in without a guaranteed solution.
• xs83 4y ago
  Previous start-up failed because we ran out of money, this was due to constant pivoting and not following through correctly when we actually got something that was bringing in revenue. I feel my current one is going the same direction too unfortunately, development is the only department delivering, no contracts coming through at all
• dudul 4y ago
  I've worked at a dozen startups. Some successful made me a lot of money, most failed miserably. none of them failed because we didn't scale the tech, or use the wrong language or a bad DB schema or whatever. It was always market fit, constant pivoting, lack of product focus, etc. And I'm not saying "it's never the engineers' fault". Engineers should worry about stuff like that, but we spend way too long focusing on stupid things like the language or the DB engine we use.
  • Lacerda69 4y ago
    funny how this is everyones tale. basically all in this thread failed bc no customers.
• JohnFen 4y ago
  My first startup failed because I started it around one product. That product was a great success, but I failed to plan the next soon enough to get it developed and shipping in time.
• bennyelv 4y ago
  A massive reluctance on behalf of my co-founders to actually take the product to customers, iterate on their feedback and get some paying customers in the door. Also competition in the same space who were making much better progress than us. There was always one more critical feature that we absolutely had to add before we could do it. Eventually we ran out of runway. I bailed at the point more angel money was needed.
  • Lacerda69 4y ago
    damn i would do that from the first day on. if you aint selling youre dead in the water
    • bennyelv 4y ago
      Agree 100% - I think it was due to an arrogance about the quality of the idea and the fact that "we knew" what was going to be best, and it would be damaging to hit the market without it "perfect" according to that vision. Not my views... Like I said, I bailed, then it fizzled out.
• dSebastien 4y ago
  My two co-founders and I focused way too much on quality, delaying our launch time and time again. One more feature, one more UI/UX improvement, etc, until I ran out of money and had to get out. I shared the story here a while ago [1]. It was also discussed here on HN [2]. There's way more to it, but this was the biggest mistake we've made. [1] https://www.dsebastien.net/2021-01-04-20-months-in-2k-hours-spent-and-200k-lost-a-story-about-resilience-and-the-sunk-cost-fallacy/ https://www.dsebastien.net/2021-01-04-20-months-in-2k-hours-... [2] https://news.ycombinator.com/item?id=25627081 https://news.ycombinator.com/item?id=25627081
• DanielHB 4y ago
  "startup division" of a big company I used to work at failed because the core business was outsourced to a different company. Our job was basically to get a very complex desktop application into the cloud by getting the C++ windows desktop code to run on cloud servers. In short it worked, but not very well and performance was bad and functionality was subpar due to technical limitations The idea was that this 3rd party legacy company would own the business logic and we would make it cloud/web/iOS/Android capable and give it a usability makeover to make it so you don't need a PhD to use. We had it running on windows cloud servers for a long time and spent A LOT of time getting the code portable on linux Most of the tech guys thought we should try to cut off 3rd party and just roll our own solution for business logic (might have actually been cheaper, but longer time horizon). But lead executive refused, then lead backend dev left which trigger an avalanche of people leaving, first lead devops and lead frontend, then me. Product got cancelled
• ezedv 4y ago
  I haven't experienced what you mentioned in your question, but I can recommend to you this article: https://www.ratherlabs.com/post/biggest-mistakes-first-time-startup-founders-make-and-how-to-avoid-them https://www.ratherlabs.com/post/biggest-mistakes-first-time-... It talks about mistakes first-time startup founders made, and also how to avoid them, it's a very interesting reading!
• llamajams 4y ago
  Got into it for a buddy, we became leading cofounders along with 5 others. It was in ag tech before ag tech was a work. I had expressed that I had no knowledge or interest in the buisness domain but I'm in to because I like the tech and the people. Fast forward a while and we get to the cold calling stage. And I'm getting frustrated because I'm wearing 25 hats and running surveys and whatever, and we don't have good leads , we HAVE to start cold calling and I whip up a list of a 100 or so numbers and call a meeting and say , "look we have to go through these" , absolutely noone wanted do to it, not even the guy who's idea this was. I walked away shortly after that and it never went anywhere.
• north_african 4y ago
  Couldnt fund it: the idea is extremely obvious in the market and waiting to be built!
• dpezely 4y ago
  The combined professional network of founders and initial investors can minimize impact and effects of many factors discussed in other comments here. "If you need to make a single cold call in the first 2-3 years, consider your network might be insufficient." Such cold calls would include finding: co-founders, investors, customers, service providers, manufacturers, employees, etc. Mind you-- I got this wrong in my own startup that didn't survive. Having advised founders and non-tech entrepreneurs in Seattle, SF and Vancouver and of those who heeded the advice, they succeeded where I didn't. E.g., when I had a co-founder flake on me, my network was insufficient to have another person I could trust to step in as subject matter advisor. Not that I would have expected that advisor to write code but perhaps to guide me through the principles of the niche topic such that I could then find the right contractor or employee. Likewise, for some businesses including certain SaaS: picking your first customers carefully often requires a chain of trust in both directions; i.e., your network.
• dearroy 4y ago
  In March 2020, I had an idea to build an email client to help the Chinese use the best email services in the world (Gmail, live.com, Yandex, etc.). I didn't take the time to validate my idea before diving into product development. I registered a domain, hired someone to design the logo, and hired an outsourcing company to develop the software and the website. I spent thousands of dollars and three months on it, only to find that there was no real demand for it. People preferred to use a VPN instead of trusting an unknown email client, so it was a total waste of time and money. These failure experiences led me to build EarlyBird (https://earlybird.im https://earlybird.im) - a no-code SaaS for startups to turn ideas into customers, I want to help people avoid making the same mistakes when starting up.