8 ms·
Mistakes You Should Never Make (2014)
- startupsfail 3y agoDue Diligence. Don’t forget that the amount of scrutiny that an accepted YC startup gets amounts to their YC application being read a few times, a ten minute interview with three partners, a background check and another ten minutes for a decision. This is a lot less than a regular job interview. Consequently, anyone who can sing a song that YC wants to hear has a chance of passing.
- deleted 3y ago[deleted]
- eldritch_4ier 3y agoOnce you get accepted they do further diligence (that can take several weeks if you’re missing things or have been sloppy) to get it all together before they give you the money and let you do demo day.
- philwelch 3y agoA single bad investment, in a market where most firms fail but a tiny minority deliver outsized returns, does not ruin the entire portfolio. Conversely, a single bad hire can ruin an entire team, department, or company.
- asimpleusecase 3y agoCompany did not survive. Appears he is still citing Harvard on his LinkedIn https://www.linkedin.com/in/sethbannon https://www.linkedin.com/in/sethbannon? Even though he calls this a mistake in this ten year old blog post
- deleted 3y ago[deleted]
- nohuck13 3y agoHe is citing Harvard University Extension School on his LinkedIn. He says he regretted implying that he dropped out of Harvard College.
- SoftTalker 3y agoI'm not sure I agree that just saying "I dropped out of Harvard" is a bad thing. After all, Harvard is putting their name on the "Extension School." If they didn't want to trade on their reputation, they could have called it something else.
- optymizer 3y agoI got my Master's at Harvard Extension School. It doesn't feel right to say "Harvard", though I sometimes say "Harvard" if I don't want to get into the usual conversation about what the Extension School is, but only if it's not important to the discussion and there's no harm done. Sometimes random online forms ask what college I attended for no good reason, so I'll just type "Harvard"; if Mark Cuban would ask, I'd always say "Harvard University Extension School" to avoid misleading him.
- stavros 3y agoWhat's an extension school? That part of the article confused me. Is it not a part of Harvard?
- kelnos 3y agoIt's usually a satellite (or even virtual) location (or locations) that the parent university administers. Extension schools usually cater to past-college-age adults for continuing education, are often part time, and are usually commuter schools (and don't really have a live-in campus culture). I can't speak to any differences in quality of instruction, but I wouldn't be surprised if the admissions requirements at most extensions schools weren't as strict as for the parent university (which makes sense, because people attend for very different reasons, often at different stages of their lives, with different backgrounds than you'd expect for a high school grad going to an undergraduate university). I think, though, that the disdain for saying "I went to Harvard" when you've attended the extension school is rooted more in emotion/ego/pretension than anything else. A "real" Harvard attendee might not actively look down on someone who attended HES, but would probably scoff at the idea that they "went to Harvard". Higher education has a lot of weird social signaling and other crap that's hard to unpack. But I do think that the accepted meaning of "I went to X" is that you physically attended classes full-time at the university's main campus. Saying that, when you attended their extension school, is at best misleading.
- throwaway89201 3y ago> Company did not survive. He's now "Founding Partner, Fifty Years [Seed fund], 2015 - 2023" > Appears he is still citing Harvard Yes, because he did study at Harvard's "Extension School", which is properly cited on the page.
- deleted 3y ago[deleted]
- fnordpiglet 3y agoIt says Harvard university extension school on his profile. That’s what he said he would start calling it in the blog.
- deleted 3y ago[deleted]
- gfthcshh 3y agoIsn’t the IRS generally willing to work out plans for paying back taxes?
- SoftTalker 3y agoWhat didn't make sense to me about that story is that even if their payroll system wasn't submitting the tax payments to the IRS, it seemed it was witholding the tax on the payroll. So the money was sitting in an account somewhere, they should have had it available to pay all the back taxes. They would only really be out the penalties, which could probably have been negotiated down on the basis of an "honest mistake." Though he did admit to sloppy bookkeeping overall, so maybe they saw all this money in the bank account and spent it on other stuff.
- sethbannon 3y agoPost author here. We did work out a repayment plan for some taxes. Payroll taxes are generally "if you have the money in the account, you have to pay immediately" though, so we wrote a large check for those as soon as we discovered the error.
- sneak 3y ago> In the early days I would often let potential customers think we already had a feature they wanted and, if they signed, would come back to the team and say “we’ve got to build this before they launch!” No harm, no foul, I thought, so long as we knew we were able to build the feature before they started using the product. This is a tactic commonly suggested by lean practitioners. My co-founders, though, would often frown on this behavior, worrying it was unethical, causing a huge amount of tension to grow beneath the surface. I'm not a lawyer, but I'm pretty sure this is the same kind of fraud that Holmes got nailed to the wall for committing. It's entirely possible to close deals without lying, if you can still deliver the needed functionality in time. Why would anyone do this?
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- bee_rider 3y agoIf you are competing against folks who always tell the truth, a willingness to lie will get you some short-term wins. He said it is “commonly suggested by lean practitioners” whatever that means. Personally it makes me want to figure out what a “lean practitioner” is so I can avoid them like the plague.
- deleted 3y ago[deleted]
- hectormalot 3y agoFrom experience, this is quite common in enterprise sales. Having been on both sides of such transactions, I’m now quite sceptical of features/functionalities unless I can test drive myself. Some stuff I’ve seen: - chatbot sales: “see how it recovers here because I misunderstood the question and gave a different answer than expected?”. (Demo was a linear path with this ‘recovery’ hard coded) - Buy side: “yes absolutely we already integrate with X”. Queue 12 months of delays because they had never integrated with that platform before. But, I think I get it. The deals are huge and you only sell a few a year. Once an enterprise commits, it is unlikely to switch vendors unless it goes really really bad. So, the salesperson that convincingly lies gets the deal, and surprisingly the downside is relatively limited. OTOH, not massaging the truth might mean losing that deal. Huge downside, very limited upside. (Yes the buyer might be a bit more happy, but that likely doesn’t outweigh sometimes missing a multi million deal, unless buyer talk a lot with each other).
- deleted 3y ago[deleted]
- deleted 3y ago[deleted]
- paulryanrogers 3y ago> I would often let potential customers think we already had a feature they wanted and, if they signed, would come back to the team and say “we’ve got to build this before they launch!” And the takeaway is to make sure your cofounders are OK with this first. Maybe just don't commit fraud? If something is truly a dealbreaker then just be honest and promise to build it out with contract terms giving them an out if you fail? Do these people use deceptively attractive pictures in their dating profiles? Then expect they'll just hit the gym and/or plastic surgeon if they can convince someone to connect with them?
- deleted 3y ago[deleted]
- sethbannon 3y agoPost author here. If a customer asked "and I'll be able to upload my own data?" and the response was "absolutely" even though that functionality didn't exist yet because we knew we could build it before they launched, that's nothing approaching fraud. I don't believe we ever once didn't have a feature like this that a customer wanted before they actually launched. The disagreement is whether it's ok to just say "absolutely" or whether it's important to say the full "just to be clear, the product can't do that today but we can build it before you launch." 10 years later I'd take the latter approach.
- dagw 3y agoI've been on the other side of this. We talked to this startup about their product and they claimed it had exactly the features we needed. We said fantastic and were ready and willing to hand over $10-20k to them for this, and they just kept stalling and making up excuses and demoing things that didn't actually do what we actually needed. Eventually they had to admit that they couldn't deliver the feature we needed. We were rather pissed off and cut all future dealings with them. They could have ended up with at least $50k from us over 2-3 years if they'd been honest and showed willingness to work with us, and instead they got zero.
- deleted 3y ago
- lifeisstillgood 3y ago- never promise something that has not already been built. - never put a timeline on something that has not already been built (#) - sell what you already have Software is incredible. you can sell one copy and instantly have another ready to sell. It's the best business in the world - don't make your life more complicated (#) Oh ok. but give timelines with "cones of confidence" and ensure everyone else upstream and downstream does the same and can adjust their cones. It's kind of like how projects are managed today (hit this date or we panic) but with less wild swings - I am pretty sure there is some feedback-control logic thing there. Percentage confidence of delivering depenandcies enables the people expecting multiple dependencies to manage their panic levels and their resource allocation (ie project mama gets need to be in every detail or just don't have project managers and have systemic feedback loops)
- ranting-moth 3y ago> Just as important are frequent, honest checkins to see how everyone is feeling on an interpersonal level. That only becomes meaningful when there is already 100% trust. People learn very quickly (usually the hard way) that honest answers are not always in their best interest.
- SoftTalker 3y agoYep, every time I've ever worked for a manager who wants regular 1:1 meetings "just to touch base" I pretty quicky just start feeding them platitiudes that I know they want to hear. They are without exception holding these meetings because of their own self-confidence issues, if they were concerned about me getting work done they wouldn't keep pulling me away from it.
- paulryanrogers 3y agoHow often? Do they catch on to the platitudes?
- SoftTalker 3y agoWeekly meetings were the norm when this happened to me. I guess maybe "platitudes" isn't quite the right word but there just often wasn't much to say from one week to the next and saying "same as last week" was never enough, it was like we were obligated to spend 30 minutes talking about work because that is what was on the calendar. So a lot of it was repetition of stuff that my manager already knew (or should have) but for some reason wanted to hear it again week after week.
- bsder 3y ago> Yep, every time I've ever worked for a manager who wants regular 1:1 meetings "just to touch base" Huh? Not even slightly. I scheduled one-on-ones with my reports generally every week and no later than every other week. No exceptions for me. My reports could always opt out of them if they chose (maybe they were super busy--maybe nothing needed to be covered), but I could do so only very rarely and I forced myself to reschedule. It is vitally important to make sure that people reporting to me could get my personal attention even when I was super busy. While I'm sure some of them "fed me platitudes", they also sometimes jumped up and down about something going wrong that they didn't feel comfortable bringing up in public contexts. That's really important.
- clnq 3y agoAnother mistake/very expensive hard lesson I've learned is to never bring people into leadership on potential. Not unless there are exceptional circumstances where you can confidently say the person, even lacking experience, will perform.
- calderwoodra 3y agoIn "the hard thing about hard things" they echo this advice as well - usually your executive team should have previous experience with the exception of maybe one person.
- clnq 3y agoThanks for the book recommendation!
- jasfi 3y agoDo you mean high-level leadership? Everyone has to start somewhere after all.
- sethbannon 3y agoI'm the author of the post. Happy to answer any questions anyone has! So many lessons learned the painful way.
- jajajsjsjjd 3y ago[flagged]
- __s 3y agofyi you misspelt startup as starup at one point
- sethbannon 3y agoThanks for helping me catch a 10 year old typo!
- calderwoodra 3y agoThanks for writing this up, I found it very useful and I promptly went to go check that we're paying our payroll taxes haha.
- hitekker 3y agoDid your cofounders forgive you?
- frandroid 3y ago[flagged]
- deleted 3y ago[deleted]
- itscodingtime 3y ago“Entrepreneurs often write about what’s going right, but too rarely write about what’s gone wrong“ They do in retrospectives like this after they achieved later success.I found that a lot of rich and successful people in different domains love talking about pass failures after they eventually succeed. You very very rarely see a post on here from someone who failed, and they do not know how to fix the issue or their next move in life.
- sethbannon 3y agoFwiw I published this post when my startup was falling apart because of my mistakes and I had no idea how to save it (and in the end couldn't).
- gibolt 3y agoHave you had any follow-up advice or epiphanies that could have reasonably helped save it, after the time of this post?
- itscodingtime 3y agoThat’s honestly amazing. I apologize if my comment seemed specifically targeted to you.
- deleted 3y ago[deleted]
- dang 3y agoUrl changed from https://web.archive.org/web/20140803073308/http://sethbannon.com/mistakes-you-should-never-make https://web.archive.org/web/20140803073308/http://sethbannon.... Submitters: Please don't make archive links top-level submissions unless you've searched and there's really no other option. https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20archive%20original&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
- srcreigh 3y agoITT we’re all learning why people don’t honestly share their mistakes. Be better folks.
- deleted 3y ago[deleted]
- approxim8ion 3y agoTen years later this company, its product, the money that went into it, and most evidence of its existence barring this post and another article covering it, seems to have vanished into the aether. The author of course seems to be doing fine at some VC firm. Just so you know what kind of behaviors Silicon Valley rewards.
- georgespencer 3y ago> What kind of behaviours Silicon Valley rewards Introspection? Honesty? Reflecting on one’s mistakes? Personal growth?
- approxim8ion 3y agoMove fast, break things, pretend to be sorry about breaking things, move fast away from the broken things, keep at it as long as there's someone else left holding the bag.
- hitekker 3y agoThe author is not answering questions anymore so here's a link to the 2014 expose https://newrepublic.com/article/119350/amicus-app-how-tech-investors-are-failing-due-diligence https://newrepublic.com/article/119350/amicus-app-how-tech-i.... > In plain English, this roughly amounted to saying: I, [Seth Bannon], have lost most of your money and my employees due to a combination of incompetence and evasiveness. I have no prospect of raising more capital, and my only chance of generating new revenue is a product that’s still unproven. Nonetheless, I’d like your blessing to keep going. It was preposterous pitch. But something strange happened after he made it: The investors more or less acceded. They weren’t going to kick in more money, but neither would they force Bannon out. > ... No surprise, then, that at least one investor, Dave McClure of a Y Combinator-like accelerator called 500 Startups, was practically blasé in response to Bannon’s email. “[I]f you need an office in NYC to work out of, we probably have some extra space,” McClure wrote, cc’ing the group. McClure said he hoped Bannon had “enough trust / bandwidth / support to keep rolling.” My take is that the apology in the OP is performative. The lessons are weak, both in an ethical sense and a business sense. But the words are a good shroud for their failures; it's a "learning experience" that they used to pursue a career in venture capital.
- onetimeuse92304 3y ago> In the early days I would often let potential customers think we already had a feature they wanted and, if they signed, would come back to the team and say “we’ve got to build this before they launch!” There is much simpler solution. Just tell the customer you can have the feature in a short time, cost free. Tell them you value your relationship with them and you are always interested in making the product better with the feedback of the customer. Knowing they are able to develop a feature quickly is valuable. I know it just becomes a discussion about pricing and priorities. Knowing they can be honest is also valuable. It reduces the risk I have stumbled on another dishonest company that just looks perfect until you sign the contract. I worked with a lot of companies. I have dropped a bunch of them for lying to us because I am sick and tired of dealing with untrustworthy service providers. And if you keep lying about your features, guess what, you are bound to slip up be caught at some point.
- PhasmaFelis 3y agoIt's weird how he wrings his hands over the damning half-truth of telling people he dropped out of Harvard instead of the Extension School at Harvard, but seems tolerantly baffled that his coworkers didn't like him outright lying to clients about their software capabilities. He's still defending that as a "common practice."