3 ms·

This is one of the better pieces linked to from HN in some time, yet most of the comments here are critical of either the author or her husband or both. Critics

by sutro 17y ago

This is one of the better pieces linked to from HN in some time, yet most of the comments here are critical of either the author or her husband or both. Critics, please raise your hands if either you or your spouse has raised $10M in a depressed economy, nationally launched a new consumer product into a hyper-competitive industry, and achieved multi-million dollar revenues while trying to hold a marriage and family together. Anyone? Bueller?

christofd 17y ago
What's questionable about the article is that it portrays entrepreneurship being so extreme and anti-social. It's about running a business. Bill doesn't do a good job here. He's great at marketing and raising money but that's not what a company survives on and continues to pay people's paychecks and paying back his investors. Summary: the company founder did a poor job at taking care of employees, investors and his own family. Is this considered desirable behavior these days? I thought we learned something from two market crashes after 2000. This is basically a typical reckless Gen-Xer dot-com story risking it all and going broke. I'm amazed his investors (which got screwed) even gave him money.
- sutro 17y ago
  You imply that you could have done better. So please share your relevant comparable experience. Ever raise $10M and bear the weight of those investor expectations? Ever been CEO of a multi-million dollar company? Ever launch a manufactured consumer product? I suspect that it might be a bit difficult. I suspect that what is best for your investors, your partners, your employees, your customers, your family, and yourself might not always be the same thing, which I suspect might lead to many difficult decisions along the way, decisions which unfortunately will later get called into question by a peanut gallery of HN readers who consider themselves business experts because they've built a couple of websites.
  - christofd 17y ago
    Well, I've raised and received an acquisition offer of about that number, but the startup team quickly disintegrated. Guess what, I don't put this on my resume! It was a failure and caused a major fallout under several friends! Regarding the "built a couple of websites" - I've worked for startups in bioinformatics/ AI and for public research projects with several million bucks funding. I'm sorry but my heroes are company owners that can sustain a business for a long time and give back to the community. Not quick scams that screw over investors. I know quite a few startup founders (in IT) here in Ontario, Canada, that know how to support their people. And these aren't guys building websites, but in the 'top 10 awards, up and coming in Canada'.
    - sutro 17y ago
      The guy hung in for 6 years on a modest salary, not quitting until his hand was forced when the bankruptcy court rejected his buyout offer. How is that a "quick scam?" He kept the business close to the edge of solvency because he was optimizing for growth rather than profit on the entirely defensible theory that he needed to quickly get the business to a size where economies of scale would work in his favor. (It's a strategy that Bezos used at Amazon in the early years too, consistently forsaking profit in favor of growth and operating in the red to do so.) Investors know the risks involved. Nothing in the article suggests that they were "screwed over" as you claim. In fact the "risk it all, go for broke" attitude that you blame on the CEO is more likely attributable to his investors, who are going to push for strategies that result in a 5x-10x ROI.
      - christofd 17y ago
        Sorry, for the long comment in advance. But this issue is something that has been bothering me for a long time. Agreed, I give the guy all the credit for hanging in for 6 years and as mentioned before his strength in raising capital and marketing. He's definitely not ordinary. But in the end - does he have a sustainable business, where he gave back to the community? Is he in the ranks of a stable company owner, who can finance his children's and his employees's children's college education etc.? I know people like this and I don't know that much about how hard it was for them to outlast. But this is the measure of success. Not the 'almost' go-big-go-bust success displayed annoyingly in many American business zines (Inc, Fast Company, Business Week, Wired etc.) during the dot-com era... and this recent article. Daimler-Benz, Siemens, GE... they are all still here and it took them a long time to grow. History is on my side on this issue: 2 major market crashes - dot-com and now real estate. My family lost a good portion of their retirement money as many others have. The end result of so much hype in the market is hazardous to society. Summarizing, raising capital with inflated growth targets is a thing of the 90s. Growing a business slowly is the way to go, unless you have a major technology or product breakthrough. I must add - this is a personal view. Many others will still achieve success growing quickly.
deleted 17y ago
[deleted]
psranga 17y ago
Several points in no particular order why I think this may be a "good" article (i.e., it's good storytelling), but I'm still critical of this article. While writing this reply, I skimmed a couple of food startup companies on Wikipedia. It looks like these guys tried to do a SoBe (started 1996 bought by Pepsi in 2000; they year they started their company) and failed. I'd be very interested in an account of the SoBE story. 1. No reasoning in the article about why they thought this drink would sell. 2. First expenses are to buy two Land Rovers? AFAIK, these are not the cheapest SUVs. And this is literally like in a recent bad movie I watched ("Role Models"). 3. On the same lines, they got an RV and two salespeople to drive around nationwide in an RV handing out samples? Was this drink even available nationwide? I've never seen it. Why were they spreading themselves so thin? 4. No mention in the article about how they got things done on the cheap. Which is a staple of all startup stories. Looks like they splurged on everything. 5. I had to read the BevNet link somebody posted to this article to find out that this drink costs much more than sodas because it uses real juice. It costs $1 to make and sells for $1.29. Is there a tiny probability that this could have contributed to the failure of the drink? 6. I mean this thing costs in the range of Red Bull and Starbucks but they market it as a competitior to Pepsi and Coke? 7. As I kept reading the article, I noticed how everything was being blamed on everybody else other than Bill. Bill did no wrong, and others let him down. I did not see enough evidence to convince me that this was the case. 8. Though billed as wife's story, this article is equally about Bill. So I have a problem that Bill is written up from the point of view of an adoring wife. 9. The BevNet thread shows that there are some people who are very angry with Bill. Btw "Wayne" (he doesn't get the courtesy of his real name being using, I think he's Mike Gilbert from the bevnet thread) has a book out to put his side of the story. This article sounds like an attempt to rehabilitate Bill's reputation. 10. Notice how they heavily criticize LKCM for "attempting" to bankrupt the company. But I'm supposed to find nothing suspicious about Bill proposing a deal with a new investor which would give the new guys 51% of the company (meaning management control with ability to replace Bill etc). 11. In short, at the end of the article, I was completely unsurprised at the total failure of the company. There is only one lesson to learned from this story for me: if hire a Bill, you'll fail. But I already knew that.

by sutro 17y ago

christofd 17y ago

What's questionable about the article is that it portrays entrepreneurship being so extreme and anti-social. It's about running a business. Bill doesn't do a good job here. He's great at marketing and raising money but that's not what a company survives on and continues to pay people's paychecks and paying back his investors. Summary: the company founder did a poor job at taking care of employees, investors and his own family. Is this considered desirable behavior these days? I thought we learned something from two market crashes after 2000. This is basically a typical reckless Gen-Xer dot-com story risking it all and going broke. I'm amazed his investors (which got screwed) even gave him money.

sutro 17y ago
You imply that you could have done better. So please share your relevant comparable experience. Ever raise $10M and bear the weight of those investor expectations? Ever been CEO of a multi-million dollar company? Ever launch a manufactured consumer product? I suspect that it might be a bit difficult. I suspect that what is best for your investors, your partners, your employees, your customers, your family, and yourself might not always be the same thing, which I suspect might lead to many difficult decisions along the way, decisions which unfortunately will later get called into question by a peanut gallery of HN readers who consider themselves business experts because they've built a couple of websites.
- christofd 17y ago
  Well, I've raised and received an acquisition offer of about that number, but the startup team quickly disintegrated. Guess what, I don't put this on my resume! It was a failure and caused a major fallout under several friends! Regarding the "built a couple of websites" - I've worked for startups in bioinformatics/ AI and for public research projects with several million bucks funding. I'm sorry but my heroes are company owners that can sustain a business for a long time and give back to the community. Not quick scams that screw over investors. I know quite a few startup founders (in IT) here in Ontario, Canada, that know how to support their people. And these aren't guys building websites, but in the 'top 10 awards, up and coming in Canada'.
  - sutro 17y ago
    The guy hung in for 6 years on a modest salary, not quitting until his hand was forced when the bankruptcy court rejected his buyout offer. How is that a "quick scam?" He kept the business close to the edge of solvency because he was optimizing for growth rather than profit on the entirely defensible theory that he needed to quickly get the business to a size where economies of scale would work in his favor. (It's a strategy that Bezos used at Amazon in the early years too, consistently forsaking profit in favor of growth and operating in the red to do so.) Investors know the risks involved. Nothing in the article suggests that they were "screwed over" as you claim. In fact the "risk it all, go for broke" attitude that you blame on the CEO is more likely attributable to his investors, who are going to push for strategies that result in a 5x-10x ROI.
    - christofd 17y ago
      Sorry, for the long comment in advance. But this issue is something that has been bothering me for a long time. Agreed, I give the guy all the credit for hanging in for 6 years and as mentioned before his strength in raising capital and marketing. He's definitely not ordinary. But in the end - does he have a sustainable business, where he gave back to the community? Is he in the ranks of a stable company owner, who can finance his children's and his employees's children's college education etc.? I know people like this and I don't know that much about how hard it was for them to outlast. But this is the measure of success. Not the 'almost' go-big-go-bust success displayed annoyingly in many American business zines (Inc, Fast Company, Business Week, Wired etc.) during the dot-com era... and this recent article. Daimler-Benz, Siemens, GE... they are all still here and it took them a long time to grow. History is on my side on this issue: 2 major market crashes - dot-com and now real estate. My family lost a good portion of their retirement money as many others have. The end result of so much hype in the market is hazardous to society. Summarizing, raising capital with inflated growth targets is a thing of the 90s. Growing a business slowly is the way to go, unless you have a major technology or product breakthrough. I must add - this is a personal view. Many others will still achieve success growing quickly.

deleted 17y ago

[deleted]

psranga 17y ago

Several points in no particular order why I think this may be a "good" article (i.e., it's good storytelling), but I'm still critical of this article. While writing this reply, I skimmed a couple of food startup companies on Wikipedia. It looks like these guys tried to do a SoBe (started 1996 bought by Pepsi in 2000; they year they started their company) and failed. I'd be very interested in an account of the SoBE story. 1. No reasoning in the article about why they thought this drink would sell. 2. First expenses are to buy two Land Rovers? AFAIK, these are not the cheapest SUVs. And this is literally like in a recent bad movie I watched ("Role Models"). 3. On the same lines, they got an RV and two salespeople to drive around nationwide in an RV handing out samples? Was this drink even available nationwide? I've never seen it. Why were they spreading themselves so thin? 4. No mention in the article about how they got things done on the cheap. Which is a staple of all startup stories. Looks like they splurged on everything. 5. I had to read the BevNet link somebody posted to this article to find out that this drink costs much more than sodas because it uses real juice. It costs $1 to make and sells for $1.29. Is there a tiny probability that this could have contributed to the failure of the drink? 6. I mean this thing costs in the range of Red Bull and Starbucks but they market it as a competitior to Pepsi and Coke? 7. As I kept reading the article, I noticed how everything was being blamed on everybody else other than Bill. Bill did no wrong, and others let him down. I did not see enough evidence to convince me that this was the case. 8. Though billed as wife's story, this article is equally about Bill. So I have a problem that Bill is written up from the point of view of an adoring wife. 9. The BevNet thread shows that there are some people who are very angry with Bill. Btw "Wayne" (he doesn't get the courtesy of his real name being using, I think he's Mike Gilbert from the bevnet thread) has a book out to put his side of the story. This article sounds like an attempt to rehabilitate Bill's reputation. 10. Notice how they heavily criticize LKCM for "attempting" to bankrupt the company. But I'm supposed to find nothing suspicious about Bill proposing a deal with a new investor which would give the new guys 51% of the company (meaning management control with ability to replace Bill etc). 11. In short, at the end of the article, I was completely unsurprised at the total failure of the company. There is only one lesson to learned from this story for me: if hire a Bill, you'll fail. But I already knew that.