6 ms·

Jason Calacanis: What to do if your startup is about fail

78 points by jasonlbaptiste 18y ago

tptacek 18y ago
"11. Having staffers who you really need to double down and focus walk out the door after you helped make their careers." Holy shit, is he serious?
- eterno 18y ago
  He is dead serious and that is an incredibly honest and accurate piece of advice.
  - tptacek 18y ago
    He laid off half his staff. Then he laid off half his staff again. He's spending 20 hours a week on the phone with irate creditors he's trying to renege on. His investors are saying they're going to ruin him. He laid off half his staff again. He's being sued 6 times over. One of his creditors is physically stalking him. The press is writing stories calling him a fraud. He hasn't slept in six months. His customers aren't paying. And he's pissed that his staff is accepting other job offers? Because he "made" them? I helped kill a startup in 2001 too. I didn't tell myself I had done a favor for the people I brought along for the ride. I mean whatever, I'm being a drama queen about this. I just hate the meme that startup employees owe founders anything. Most of them have no idea what they're getting into, and founders like it that way.
    - ibsulon 18y ago
      Look at that "hasn't slept in six months" thing again. This tends to play on someone's emotions quite heavily. To be fair, it is quite possible that in a media-based startup like a newspaper, the company did make these people a star. However, I don't think I'm seeing anger as much as "oh shit, what do we do now?"
      - tptacek 18y ago
        The story I'm quoting happened years ago. I think he slept OK before he wrote that.
      - jasonmcalacanis 18y ago
        I think you've got it right. There were people who were nobodies who we hired out of college and made into brands who jumped ship at the first sign of trouble. That sucked, but it's too be expected. There were many others who stayed and fought the good fight. Imagine having a print magazine about the dotcom industry in 2000 that was 300 pages.... and then the dotcom crash happens and 98% of your revenue goes away while 90% of the companies you cover go away. It was brutal to say the least.... but it made me into a killer. :-)
    - chiffonade 18y ago
      > I didn't tell myself I had done a favor Trust me, if you weren't a delusional prick or egotist, nobody blames you personally for failure. Failure happens, it's a startup. The problem is that a high percentage of people who actually have the balls to helm a startup are delusional egotists.
- danbmil99 18y ago
  > Holy shit, is he serious? If you have to ask...
staunch 18y ago
How does legally reducing the salary of a current employee work?
- tptacek 18y ago
  "I'm reducing your salary. If you don't like it, quit."
  - staunch 18y ago
    No notice or consent required? Edit: Salary vs hourly make any difference?
    - tptacek 18y ago
      "You know what? I just don't like you very much anymore. Pack your shit and get out." Also legal in most states.
    - wayne 18y ago
      Even easier for a startup. All the fun employees benefits like "2 weeks notice" don't apply until a company is a certain size.
      - tptacek 18y ago
        Large companies aren't required to give any notice of termination in at-will states.
- jwesley 18y ago
  Unless they have a contract, they are at-will employees, meaning you can fire them or reduce their salary at will. On the other side, they can quit at will as well.
  - tptacek 18y ago
    No lawyer is going to let you accidentally draw up a contract that would get you sued for firing someone; you'd probably (I say this as if I know, which I don't) just lose things like your noncompete.
eterno 18y ago
This is one of the most brilliant startup stories I have read in a while. Im not a big calcanis fan and dont think too highly of mahalo, but the amount of wisdom and insight in this post left me reading this over and over again for almost an hour (Normally, I dont read anything 1/10th this long and even if I do, I just skim.)
- danbmil99 18y ago
  I agree. I knew Jason back in the day, and frankly, he was a bit of a dipshit. he was hot and trendy, and knew it and played it. It sounds like he's grown up a bit. Maybe we all have (group hug?)
  - jasonmcalacanis 18y ago
    1. Even a broken clock is right twice a day. 2. you can't help but a learn a couple of things after three or four startups. :-)
    - danbmil99 18y ago
      Reminds me of a russian proverb my co-founder attributed to his great-uncle: "The first time you get hit by a train, it really hurts. The second time, it still hurts. By the third time, you start to get used to it."
smanek 18y ago
During the final year of Silicon Alley Reporter I made cold calls and set up lunches to sell folks on our new product, Venture Reporter (the rebranded Silicon Alley Reporter). It works. When people see the CEO making sales calls, they respect the company and take it seriously. If I got a cold call from the CEO I would think they were desperate, doubt that they would be around in 6 months, and probably decide that I wanted to do business with someone more stable.
- lionhearted 18y ago
  I flew from the East Coast to Europe to speak at a big conference, and we got sales leads there. I was sitting there with my sales guy, and I didn't like something he was doing on the calls - I forget what exactly, but something didn't sit right with me. I couldn't quite articulate what was going wrong, so I just I started dialing up a bunch of people myself. "Hi, this is Sebastian... yeah, me, I run things around here... anyway, how'd you like the talk? Oh cool. Anything I could've done better? No? Nothing? Come on now, don't mess with me dude. Oh, that is interesting, thank you. Anyways, I wonder if our company can make your life better. Where you at right now? Uh-huh... and how about this particular solution? Uh-huh... yeah mate, I got something good I reckon we could do for you." People love hearing from the high-ups in a company. And you completely lose track of real life if you're not actively spending time in the trenches. That means doing any role you yourself can do periodically, and buying tea/Japanese food for engineers and technical people whose jobs you don't understand, while really testing their patience with your dumbass, Luddite questions. And constantly reminding them that you know you're a Luddite, but you really want to understand what the hell is going on in the trenches anyways. Call people. They love it. You won't come across as desperate unless you actually are desperate, and even then, the desperation vibe will fall off if you call even more people.
  - herval 18y ago
    But you're talking about existing customers, right? Which is an entirely different kind of beast...
  - smanek 18y ago
    I'm totally in favor of having higher-ups help existing customers (I know a few companies that do this, and I like it too). I'd even be OK with a CEO sitting in on late game sales calls/meetings, but that's a whole different issue than having a CEO make cold calls (or even having a CEO on early sales calls). It gives the impression of a one-man shop, which prospective clients will, in most cases, try to avoid.
vaksel 18y ago
pretty much the key point to take away from this, is always ask for freebies, it costs you nothing...and who knows someone might hook you up, you'll never know unless you ask
alain94040 18y ago
I read this and found it very motivational. It also matches my own impression that the last few years, too many fake startups got the spotlight when us the hardworking, real entrepreneurs, were ignored (I say this with some self-derision). To me, the only silverlining in this economic downturn is that the few startups left are real. No more "social network for cats."
rokhayakebe 18y ago
The only line that matters and you should put this everywhere in your house and office: If you can’t sell your product, it’s not a product–it’s a hobby.
Mistone 18y ago
i think this is one of the best articles/emails i read in a long time. this is advice for becoming a cockroach and equipping your startup to survive the nuclear winter. I've actually been waiting for PG to write something that addresses the current economics for startups and what the huge batch of first time entrepreneurs are facing. its great to be the inspiration for folks to quit their jobs at mega Co, when times are good for startups, however their needs to be an equal amount of guidance and insight for what to do when times are tough. Jcal has stepped up and let us all know how we need to shift our priorities to survive. I was deeply inspired.
chiffonade 18y ago
I really have to ask, as a resident of California - have there been any massively successful startups to come out of NYC? I'm being honest when I say I can't think of a single one. Maybe my memory has selection bias since I live in the bay area and LA. Based on personal experience I would say that tech companies in NYC have a huge disadvantage because they're competing with hedge funds and investment banks for engineering talent.
- prakash 18y ago
  Doubleclick.
- dmpayton 18y ago
  I'd say Fog Creek Software is pretty successful.
  - chiffonade 18y ago
    That guy is a quack.
    - dmpayton 18y ago
      What? The company does quite well financially and Joel Spolsky (like him or not) is Internet Famous.
      - chiffonade 18y ago
        Dude, he runs a small business on the internet. I'm talking about companies like YouTube, Google, and yes, Doubleclick like the person above you said.
        dmpayton 18y ago
        I guess it all depends on how you measure success.
        18y ago
steveplace 18y ago
Step 1: Sell the espresso machine you brag about on your blog.
jyothi 18y ago
This is one of the best posts I have read on start-ups in a while. I have been through all 12 directly or indirectly. Not as a founder (rather the sole founder doesn't call me a co-founder) but the founder was blanking out. It is definitely testing time. We shut-down operations. Ran into debt and paid off with consulting/free lancing money in 4-5 months. After all that I was drained out. - Do I know the reality? Yes very much. Your time and effort in a startup can't be matched with cash even if u exit for few million dollars. It is just the satisfaction that stays. - Do I fear of starting again - Will I sign up to go through that again ? Inspite of going through hell, now i know what I am signing up for if it goes wrong and I am better prepared. But would I do it for a startup which is not mine, No.

"11. Having staffers who you really need to double down and focus walk out the door after you helped make their careers." Holy shit, is he serious?

eterno 18y ago
He is dead serious and that is an incredibly honest and accurate piece of advice.
- tptacek 18y ago
  He laid off half his staff. Then he laid off half his staff again. He's spending 20 hours a week on the phone with irate creditors he's trying to renege on. His investors are saying they're going to ruin him. He laid off half his staff again. He's being sued 6 times over. One of his creditors is physically stalking him. The press is writing stories calling him a fraud. He hasn't slept in six months. His customers aren't paying. And he's pissed that his staff is accepting other job offers? Because he "made" them? I helped kill a startup in 2001 too. I didn't tell myself I had done a favor for the people I brought along for the ride. I mean whatever, I'm being a drama queen about this. I just hate the meme that startup employees owe founders anything. Most of them have no idea what they're getting into, and founders like it that way.
  - ibsulon 18y ago
    Look at that "hasn't slept in six months" thing again. This tends to play on someone's emotions quite heavily. To be fair, it is quite possible that in a media-based startup like a newspaper, the company did make these people a star. However, I don't think I'm seeing anger as much as "oh shit, what do we do now?"
    - tptacek 18y ago
      The story I'm quoting happened years ago. I think he slept OK before he wrote that.
    - jasonmcalacanis 18y ago
      I think you've got it right. There were people who were nobodies who we hired out of college and made into brands who jumped ship at the first sign of trouble. That sucked, but it's too be expected. There were many others who stayed and fought the good fight. Imagine having a print magazine about the dotcom industry in 2000 that was 300 pages.... and then the dotcom crash happens and 98% of your revenue goes away while 90% of the companies you cover go away. It was brutal to say the least.... but it made me into a killer. :-)
  - chiffonade 18y ago
    > I didn't tell myself I had done a favor Trust me, if you weren't a delusional prick or egotist, nobody blames you personally for failure. Failure happens, it's a startup. The problem is that a high percentage of people who actually have the balls to helm a startup are delusional egotists.
danbmil99 18y ago
> Holy shit, is he serious? If you have to ask...

staunch 18y ago

How does legally reducing the salary of a current employee work?

tptacek 18y ago
"I'm reducing your salary. If you don't like it, quit."
- staunch 18y ago
  No notice or consent required? Edit: Salary vs hourly make any difference?
  - tptacek 18y ago
    "You know what? I just don't like you very much anymore. Pack your shit and get out." Also legal in most states.
  - wayne 18y ago
    Even easier for a startup. All the fun employees benefits like "2 weeks notice" don't apply until a company is a certain size.
    - tptacek 18y ago
      Large companies aren't required to give any notice of termination in at-will states.
jwesley 18y ago
Unless they have a contract, they are at-will employees, meaning you can fire them or reduce their salary at will. On the other side, they can quit at will as well.
- tptacek 18y ago
  No lawyer is going to let you accidentally draw up a contract that would get you sued for firing someone; you'd probably (I say this as if I know, which I don't) just lose things like your noncompete.

eterno 18y ago

This is one of the most brilliant startup stories I have read in a while. Im not a big calcanis fan and dont think too highly of mahalo, but the amount of wisdom and insight in this post left me reading this over and over again for almost an hour (Normally, I dont read anything 1/10th this long and even if I do, I just skim.)

danbmil99 18y ago
I agree. I knew Jason back in the day, and frankly, he was a bit of a dipshit. he was hot and trendy, and knew it and played it. It sounds like he's grown up a bit. Maybe we all have (group hug?)
- jasonmcalacanis 18y ago
  1. Even a broken clock is right twice a day. 2. you can't help but a learn a couple of things after three or four startups. :-)
  - danbmil99 18y ago
    Reminds me of a russian proverb my co-founder attributed to his great-uncle: "The first time you get hit by a train, it really hurts. The second time, it still hurts. By the third time, you start to get used to it."

smanek 18y ago

During the final year of Silicon Alley Reporter I made cold calls and set up lunches to sell folks on our new product, Venture Reporter (the rebranded Silicon Alley Reporter). It works. When people see the CEO making sales calls, they respect the company and take it seriously. If I got a cold call from the CEO I would think they were desperate, doubt that they would be around in 6 months, and probably decide that I wanted to do business with someone more stable.

lionhearted 18y ago
I flew from the East Coast to Europe to speak at a big conference, and we got sales leads there. I was sitting there with my sales guy, and I didn't like something he was doing on the calls - I forget what exactly, but something didn't sit right with me. I couldn't quite articulate what was going wrong, so I just I started dialing up a bunch of people myself. "Hi, this is Sebastian... yeah, me, I run things around here... anyway, how'd you like the talk? Oh cool. Anything I could've done better? No? Nothing? Come on now, don't mess with me dude. Oh, that is interesting, thank you. Anyways, I wonder if our company can make your life better. Where you at right now? Uh-huh... and how about this particular solution? Uh-huh... yeah mate, I got something good I reckon we could do for you." People love hearing from the high-ups in a company. And you completely lose track of real life if you're not actively spending time in the trenches. That means doing any role you yourself can do periodically, and buying tea/Japanese food for engineers and technical people whose jobs you don't understand, while really testing their patience with your dumbass, Luddite questions. And constantly reminding them that you know you're a Luddite, but you really want to understand what the hell is going on in the trenches anyways. Call people. They love it. You won't come across as desperate unless you actually are desperate, and even then, the desperation vibe will fall off if you call even more people.
- herval 18y ago
  But you're talking about existing customers, right? Which is an entirely different kind of beast...
- smanek 18y ago
  I'm totally in favor of having higher-ups help existing customers (I know a few companies that do this, and I like it too). I'd even be OK with a CEO sitting in on late game sales calls/meetings, but that's a whole different issue than having a CEO make cold calls (or even having a CEO on early sales calls). It gives the impression of a one-man shop, which prospective clients will, in most cases, try to avoid.

vaksel 18y ago

pretty much the key point to take away from this, is always ask for freebies, it costs you nothing...and who knows someone might hook you up, you'll never know unless you ask

alain94040 18y ago

I read this and found it very motivational. It also matches my own impression that the last few years, too many fake startups got the spotlight when us the hardworking, real entrepreneurs, were ignored (I say this with some self-derision). To me, the only silverlining in this economic downturn is that the few startups left are real. No more "social network for cats."

rokhayakebe 18y ago

The only line that matters and you should put this everywhere in your house and office: If you can’t sell your product, it’s not a product–it’s a hobby.

Mistone 18y ago

i think this is one of the best articles/emails i read in a long time. this is advice for becoming a cockroach and equipping your startup to survive the nuclear winter. I've actually been waiting for PG to write something that addresses the current economics for startups and what the huge batch of first time entrepreneurs are facing. its great to be the inspiration for folks to quit their jobs at mega Co, when times are good for startups, however their needs to be an equal amount of guidance and insight for what to do when times are tough. Jcal has stepped up and let us all know how we need to shift our priorities to survive. I was deeply inspired.

chiffonade 18y ago

I really have to ask, as a resident of California - have there been any massively successful startups to come out of NYC? I'm being honest when I say I can't think of a single one. Maybe my memory has selection bias since I live in the bay area and LA. Based on personal experience I would say that tech companies in NYC have a huge disadvantage because they're competing with hedge funds and investment banks for engineering talent.

prakash 18y ago
Doubleclick.
dmpayton 18y ago
I'd say Fog Creek Software is pretty successful.
- chiffonade 18y ago
  That guy is a quack.
  - dmpayton 18y ago
    What? The company does quite well financially and Joel Spolsky (like him or not) is Internet Famous.
    - chiffonade 18y ago
      Dude, he runs a small business on the internet. I'm talking about companies like YouTube, Google, and yes, Doubleclick like the person above you said.
      - dmpayton 18y ago
        I guess it all depends on how you measure success.
        18y ago

steveplace 18y ago

Step 1: Sell the espresso machine you brag about on your blog.

jyothi 18y ago

This is one of the best posts I have read on start-ups in a while. I have been through all 12 directly or indirectly. Not as a founder (rather the sole founder doesn't call me a co-founder) but the founder was blanking out. It is definitely testing time. We shut-down operations. Ran into debt and paid off with consulting/free lancing money in 4-5 months. After all that I was drained out. - Do I know the reality? Yes very much. Your time and effort in a startup can't be matched with cash even if u exit for few million dollars. It is just the satisfaction that stays. - Do I fear of starting again - Will I sign up to go through that again ? Inspite of going through hell, now i know what I am signing up for if it goes wrong and I am better prepared. But would I do it for a startup which is not mine, No.