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My Startup has 30 Days to Live

• martinkallstrom 13y ago
  I have complete understanding of your situation, having been in the position of having to let people go from a very small team a couple of times. It's hard and feels awful, but you are doing what you see needs to be done which is great in comparison to not having the willpower to act. If the developer you need to let go is as good as you say, he won't have a problem finding a new job. You feeling shitty will not help him nor you so continue working to remedy the situation to the best of your ability. That's all you need to do and I think it sounds like you will be able to look back to all of this and be proud of you being able to make hard decisions even in a situation when it's so much easier not to.
• rafe33 13y ago
  Maybe I missed it, but WHY does your startup have 30 days to live? You ran out of money and have no raise potential? How could your employee and cofounder not know this already?
  • hidingmyname 13y ago
    Founders are all very well aware, employees still in the dark. No raise potential as metrics are nowhere near where they should be. Solid IP and team that might make for a good acquisition, provided investors will OK it (they've rejected one some time ago)
    • dmor 13y ago
      Do investors know you have 30 days? Company is most valuable with team intact, and hopefully no negative PR. Don't let your company get publicly connected to your post, it could kill a deal. I'm referring to acqui-hire scenario
    • adrr 13y ago
      Pretty sure your employees know. Did you cut the free sodas and company paid lunches?
    • andrewcooke 13y ago
      shouldn't you give employees 30 days notice? or is the plan to just fire them when the money runs out? before they've had time to look for another job...
      • paulhauggis 13y ago
        haha, has this ever happened? If you give employees 30 day notice, most will look for other jobs and leave. You will then have no hopes in turning the company around.
• dmor 13y ago
  What if you just kept everyone, told them the truth that you can't pay them, and kept going? If you still believe in the core underlying thing that was working when you started then maybe you can turn this around.
• makerops 13y ago
  I am curious, as to why you didn't listen to your gut, and how old you are?
  • hidingmyname 13y ago
    The tempting lure of a big convertible note and a set of drooling investors saying that we were building "the next big thing".
    • deleted 13y ago
      [deleted]
    • makerops 13y ago
      Did you have the self-awareness at the time to realize that what you were building is something DHH would be proud of, or was that only in retrospect? I'm asking these questions, because I struggle with listening to outside advice vs listening to my gut, and Ive been trying to strike a balance as of late.
    • samspenc 13y ago
      This always confuses me: sure, you needn't have gone through VC funding, but how far could you have taken the company without it? What would have the alternative been?
• mathgeek 13y ago
  "This week, I need to speak to the other founder and fire our first employee before he leaves on a planned vacation. He’s a good developer, but I won’t fucking make payroll next week if I don’t clear him and his severance out of the company." Is it wrong that I feel worse for this employee than for the author? He's looking forward to a (probably well-earned) vacation, and he's about to be forced into a job hunt instead.
  • calinet6 13y ago
    This happened to me 6 weeks ago. I'm now happily employed at another (slightly more stable) startup with good work and a better situation. Trust me, any employee would be happier to be in a stable and improving startup than in one that's going downhill anyway. If they're a dev with startup experience, they'll have no trouble finding a new job and will be better for it. Don't worry, just be honest and open with them ASAP. The worst thing you can do is keep them in the dark.
  • hidingmyname 13y ago
    You should. I feel fucking shitty about this.
    • damon_c 13y ago
      Can't you wait till he gets back so he can have a good vacation?...Although I've seen the whole "got fired upon returning from vacation" thing happen a few times. That sucks too! Sorry for both of you.
      • throwit1979 13y ago
        Apparently you missed the part about not meeting payroll. There are few things worse( legally, in employment law )than missing payroll.
        • beat 13y ago
          Ugh. I remember what it was like the first time the 2000-era dotcom I was at missed payroll. A co-worker and I had taken the day off to take our kids to the state fair, and found our money wasn't where we thought it would be. They announced the payroll shortfall the day it happened, in company email we didn't read because we were off that day. Kinda sucked.
• cledford 13y ago
  Why not double down and keep pushing forward?
• mail2account 13y ago
  "Product after Product" It seems like you were building mobile apps
• deleted 13y ago
  [deleted]
  • hidingmyname 13y ago
    Pivoted, pivoted, then pivoted again. The other founders can't stand any more and don't want to "give up" on the latest baby. At this point, I'm running out of options and have a dev team that I can't afford to pay for much longer.
    • deleted 13y ago
      [deleted]
    • senthilnayagam 13y ago
      dont lose hope talk to your potential customers and competitors , your IP can be complimentary to someone or if your team is good you can get acquihired for sure
• siscia 13y ago
  I would like to send you an email, can you contact me ? simone at mweb dot biz
• calinet6 13y ago
  I've been through all of this, it sucks. But this line sticks with me: "Honestly think the only thing that keeps my health and my marriage intact is my running." I gotta start running. That's the one thing I always get wrong. Good luck. Just remember, this happens all the time. For you, it will be a learning experience. In a year's time, you'll be in a new situation with almost a completely new life, and your experience will be valuable to that next step. Next time will be a little bit better. You'll be a little more trusting of yourself, with a little less naivete, and you'll create something again. Or you'll help someone else create something. Either way, your life will get better, because you're a capable person who started a company, and you're capable of even more. Do the best you can right now and stay positive. The future will be brighter.
  • noir_lord 13y ago
    For me it's cycling not running (arthritis runs in my family and one knee is pretty fucked from a football injury). It's literally the only thing that keeps me going some days I reward sustained effort with a ride and a ride wakes me up, clears out the cobwebs and I get some of my best work done after a ride. It also helps that I've lost more than a stone (14lbs) in just over a month by switching diet and cycling 200 miles a week :).
  • namenotrequired 13y ago
    I wonder if he meant running literally or figuratively.
• crabasa 13y ago
  Could the OP chime in as to why he is writing and publishing this blog? It appears to be a cautionary tale, but I'm not sure what anyone can learn when all the particulars are removed. Why not just write a retrospective after the next 30 days?
  • hidingmyname 13y ago
    Not a cautionary tale, just a blog to vent my frustrations and record the experience. I'm not in a position to give "advice" nor do I suggest anyone follows "advice". If you're a new founder and about to get on the VC train, through the accelerator and out again at light speed, it's good to know that this is one way it can all end up. (Nobody really speaks about it anyhow)
    • jt2190 13y ago
      Here are some lessons I'm taking away from this article: > ... our initial desire to not raise a seed round was > dismissed and we were thoroughly convinced that we had > to continue on the VC rocket-ship in order to matter to > anyone. My reluctance to do this was met by scoffs and > dismissals from many others in the accelerator cohort... > as well as by the mentors and investors who had offered > their time, network and resources to help us succeed. Lesson: VCs want founders to take larger risks with their company for the reward of a larger payoff. If the founders don't want to "bet the farm" like this, then they probably shouldn't be seeking out VC money, or at least wait until they're profitable enough to have a lot more negotiating leverage. > I didn’t believe the shit I was selling investors. This > was not the company I put my life on the line to build. Lesson: Founders have to push back on their investors when the investors don't understand the full ramifications of what they're asking the company to do. First-time founders often fail to push back because the investor/advisor line is blurry. > When I built this team, I didn’t build it with > generalists and with people who could jump into any > area of the business and get shit done. Instead, I built > it with quality-minded perfectionists who build > beautiful things. Lesson: The founding team has to build two things: The product and the company that builds the product. Find people who can do both.
• chrisstanchak 13y ago
  I think the best way to look at this is as a learning experience. You have "scar tissue" now and won't make the same mistakes again. Since you are an entrepreneur, you will inevitably build another successful startup - except this time you'll make it happen in half the time with twice the wisdom.
• speedyrev 13y ago
  Failure is a part of growth. This may be a monumental failure, but this blog is both therapeutic and introspective for the author. Examining failures helps us as we move forward. We get the added benefit of looking in from the outside. Kudos for coming forward with this kind of honesty.
• michaelochurch 13y ago
  All I can do is wish you good luck and say that I admire you for having the courage to try. These seem like empty words, so read some of my other posts to see that I really say what I mean (i.e. I'm very harsh with people I don't think much of, so when I'm nice, it means something). I'm sorry to hear that this is happening and I hope things turn out for the best. Where are you located? What's your next move? I can't stand how these investors get so hung up on Playing God with other peoples' companies. If they want to take over the world (and endure the risk involved; since world domination has a much higher chance of failure than a sustainable, mid-growth lifestyle business) they should do it with their careers and companies, not someone else's. Elon Musk is doing the right thing. He's chasing the vision with his own work, rather than jumping into someone else's Magitek Armor and then deciding to burn Narshe. Also, these asshats are the reason it's so fucking hard for startups to get clients. Businesses (clients) have been burned, horribly, in the past by startups dropping them to chase dragons because their investors thought it a better idea to drop the client and roll the dice on some red-ocean product play with a 1-in-100 shot at success. This creates a world in which clients are very cautious about dealing with startups. We'd have a better ecosystem if the VCs were just passive investors who didn't try to live out their own adolescent do-the-world fantasies. They'd certainly make more money that way.
• tptacek 13y ago
  Your startup is going to die, you're going to get a new job (which you'll have no trouble doing), and sometime in the future you'll start another company. Maybe you'll do the next one smarter, since you'll have more experience. Signed, Been there.
  • mathattack 13y ago
    It is very hard to say "This too shall pass" during your darkest days, but tptacek is correct on this one. You'll also know who your true friends are once you get out on the other side.
    • dkrich 13y ago
      You'll also know who your true friends are once you get out on the other side. Spot on.
• greghinch 13y ago
  I'm going to say this knowing that I may get down voted to heck. And I don't mean it as a "told you so" to the OP, but rather hopefully some cautionary advice for would-be founders. I have come to the opinion that if you are bootstrapping, you have no business calling your company a startup. You are building a small business. And there is nothing shameful about this. You are among solid companions with your local plumbers, restaurants, and barbers. You make a good living building a sustainable business that is growing steadily but slowly, to serve a small group of loyal customers. But you are not a startup. Startups are about growth. About chasing metrics like 5% week over week. About going from 100 customers to 100,000 in a month. That is the reason you take VC money. It's not "I have this idea for a business, but I need some money to quit my job while I work on it". It's "I have an idea for a business that could be huge but I need to build it up fast". So when I see someone bemoaning the advice they were given by their investors, telling them they should be meeting all these crazy metrics, I can't help but ask, what did you expect? The VC isn't in the business of slow, organic growth of your company. They are in the business of generating a return for their fund within a relatively short timeframe. The advice you get is their best effort to try and help you find "explosive" growth. Before you sign your bootstrapped business on for investment money, ask yourself: is this business, and more importantly am I, really suited for massive, short term growth?
  • hidingmyname 13y ago
    You're right. Many accelerators have a knack for picking up teams that have demonstrated the ability to build things that generate revenue and traction. The siren song of money, networking and growth is really seductive. The implications you speak of (and I experienced it) aren't always so clear (or too easy for a prospective founder to dismiss).
  • rcavezza 13y ago
    You're wrong. A bootstrapped company can grow just as fast as a company that takes VC money.
    • mtrimpe 13y ago
      Yet every bootstrapped company would grow faster if it took (the right kind of) VC money. (For the record... I'm happily bootstrapping my startup which is a startup as far as I'm concerned. I'd call startups that rely on VC funding "VC startups.")
• GBiT 13y ago
  Is it legit? I saw a few 30 days left to live stories here, now 30 days for startup to live. Is it PR shit or real deal? If you fire employee you must pay compensation, so how can you not able to pay his payroll of week? If you fire him it will be more expensive then one weeks payroll.
  • unreal37 13y ago
    In most states of the US (at will employment), you do not have to pay that much severance. So you can either pay an employee their salary every 2 weeks (and their vacation is paid), or pay then 2 weeks severance. The amounts might not be that different. $2k paycheck versus $3k severance.
• acjohnson55 13y ago
  Thanks for sharing. I sympathize with you, because I just recently went through something similar, with less success than you've had. It sounds like a tough situation, but you're not out of options. You might just be out of the preferred options. It seems to me that if you're truly out of money, you can either: 1) Try to double down on funding. Your investors can either re-up you or kiss the money they've put in and the debt/equity they have goodbye. But this just puts you on the treadmill for another X months. If you don't like how that feels now, maybe it's not the best direction. 2) Try to get acquired by someone who will pay you to finish your product. 3) Get outside work to pay the bills and put your startup into side project status. Surely with what you've built, you have made yourself highly employable, and if you're in a big-time accelerator, you probably know people who need your skills. 4) Make a "personal pivot", and use the skills and experience you've developed to springboard into something else. I've come to learn that the discourse in the startup world is completely slanted toward success stories, even though success is far from the most common outcome. Almost no one gets it right the first time. For example, from my own limping startup, I've learned a lot about what I did that didn't set myself up for success, and how I would do it differently. I got a day job--which I'm loving so far--and I'm planning to save a substantial portion of my pay to build a warchest over the next few years, such that next time, I won't dive in already broke (just one of several crucial things I would do differently).
• austenallred 13y ago
  Interesting. I feel like the time most previously successful startups begin to fail is when the founders are intellectually dishonest and push forward through cognitive dissonance. You have to see and believe in a vision to make it come to life. That is my big takeaway from this - if you disagree with your VCs or don't think something will work, you have to say so. This may be a shot in the dark, but if it were me I would call up the VCs and begin having the hard conversations. "Hey, we're in trouble. I think we made mistakes here, here and here. I'm in over my head, what do we do now?" They may ask for what's left of the money back, your business may fail, but at least you go out having been straight-forward with yourself. And you can get on the horse and do it again. Just my two cents.
• alekseyk 13y ago
  Can't make payroll? Complain about being stretched thin? Start a useless blog! Perfect!
  • lnanek2 13y ago
    Considering he got on the front page of hacker news, it is far from useless. That's like 10k page views and good chance of investor/VC attention. I've gotten a couple meetings with VCs thanks to being on Mashable/Verge/etc., so Hacker News is likely no different. Actually, the page views are more from Hacker News since people go to your site directly instead of reading an article and maybe going to your site. Too bad he doesn't have contact info or anything on there to capitalize on the traffic.
• jpdoctor 13y ago
  > I’m scared. Congratulations: You're normal. Look at it this way: You are commanding on a battlefield, there are a helluva lot of guys about to die. If you freeze up, they all die. So make some fucking decisions, save as many as you can. Throw some into the line of fire for the sake of the others. It's what battlefield commanders do. The gods have chosen you for this role, rise up and do your best. You will make some bad calls, and don't sweat it. Focus on making the right calls, then course correcting the bad ones. Good luck.
  • ChuckMcM 13y ago
    I think commanding on the Battlefield is the wrong metaphor, we use it a lot but its not a battle, its a sport. When you tell your developer you can't afford to pay him any more it isn't that he (or she) "dies" its that they move on to their next job. Is it painful? Of course. But it isn't death. Sports analogies work better since there is always next season with some of the same and some different players. You decide to go for the touchdown for the win instead of the field goal to tie on 4th down. Its a choice, it works or it doesn't, you go on to the Superbowl or your don't. The decisions tomorrow will be affected by today but you will still have decisions to make. Start-ups (and I think this is one, and I think pizza stores are start-ups too) are sprouts of a business. Sometimes they grow into bushes, sometimes trees, sometimes they can't develop enough to stay alive and they die after a while. But a start-up "dying" isn't people dying. Its people going on to do something else. For non-founders their work day may proceed pretty much unchanged other than office environment and neighbors in a new job somewhere else. As for founders? Well it demands reflection and inspection to glean the maximum amount of understanding about what worked and what didn't. Sadly its the only way to learn some of those lessons.
    • jpdoctor 13y ago
      > Is it painful? Of course. But it isn't death. No, but firing somebody who is the head of household and has major medical issues at home, is a helluva lot more serious than 4th down.
      • 13y ago
• random42 13y ago
  > I really love my co-founder. It’s an enduring bromance that will last a lifetime. He’s a talented designer, supportive listener and I trust him entirely. However, he left me alone in the cold. He didn’t mean to do this, he didn’t even realize he did. I became the guy who would “do-it-all”. Biz Dev, check. Product Management, check. Support, check. Accounting, check. PR, check. Ad Copy, check. Development Lead, check. While he took complete ownership over design (and really excelling at it). Communicate. communicate! Cofounder relationship is like any other and communication matters. a lot. You will get tired, feel low and discouraged. you'll have to share it and let one person know who has an outside chance of understanding it and help you out if possible. your co-founder(s).
• marcelftw 13y ago
  > "The day we set foot into the doors of the accelerator, we had a business that DHH would be proud of" DHH is well known for being against investors in general. Why would he be proud ? My point of view on this : investors are OK while the funder(s) have more than 51% share, and therefore still making the decisions. You kind of sell your thing to satan here brother, you shouldn't have. You are not in charge of what you put so much work building, from scratch. People with money come here and change your view on the business, on your values ? Also, I feel you don't talk enough to your co-funder(s). You should not have secrets, work-wise of course. A bit of advice, if I may : at my startup (in which I'm associate, not funder), we make a scrum retrospective meeting every now and then (2-3 weeks). In these meetings every member of the team explains : 1/ what we should do more 2/ what we should do less 3/ what we should do the same (SAME !) 4/ what they have found frustrating 5/ what they are happy about 6/ any questions I feel this is really important so that every one is happy. It takes courage to explain all this in front of people, but it builds up the team... Anyway, good luck brother.
  • ikailan 13y ago
    I think you misread his paragraph. He was proud of the business the day in its state that day he walked into the accelerator (and presumably for some time before), not BECAUSE he walked into the accelerator.
• thibaut_barrere 13y ago
  You can alternatively pick the "indefinitely sustainable" road instead (for instance by mixing bootstrapping with freelancing like I did). It is much slower but much less stressful too, in my opinion!
• vidarh 13y ago
  I recognize a lot of this from startups I've been involved in. At the height of the bubble I co-founded a vanity e-mail business. We wanted it to be a paid service. Our only competitor was a paid service. But when we looked around, we saw ludicrous valuations per user for users that provided little to no revenue. And the VC's saw it too. And everyone were seduced into going for a free service and figure out monetization later. So that's what we did. Of course the bubble burst, and the lofty valuations disappeared, and we had to hunker down. The business survived, but we fired 45 or so people - the vast majority of the team, and the VC's lost most of their investment. I have two big takeaways from that experience: Be conscious whether or not you want to gamble. A gamble can be worth it, but you may be much happier building a company that'll stand a reasonable chance of giving you steady returns and pay you a salary than taking a long shot at millions. We started out wanting that reasonable chance, but got seduced into the long shot without really thinking about it. Secondly: Keep in mind the VC's often have a vastly different risk preference than you. A founder is usually investing all his/her time in a single business, often for years. A VC spreads their investment over a wide range of companies, and spreads risk accordingly. For them, it's not such a big deal if a few of their portfolio companies fail, if they get the occasional massive return, so it may make sense for them to be willing to take risks with your business that are not in your interest. It's vitally important to think through how much risk you're ok with before going out and getting investment, and to look for money accordingly, as well as consider how much control you're willing to give up depending on how aligned you think your interests are with the profile of any investors you bring in. Failures makes valuable lessons (and I've had more lessons...).
• talhof8 13y ago
  Now that's what startups are all about
• badclient 13y ago
  Do you have any HAPPY customers? Talk to them. DAILY. Why are they happy with you? ASK them and then shut up and write down why. Take a step back. What do you need to achieve break even NOW and next month? Who do you need to let go? Who do you need to keep?
• alsostayinganon 13y ago
  The grass is always greener on the other side. I too am running a startup with a downward trajectory. We have more like 6-12 months of runway left but things aren't looking good. Our path tracks your alternate reality. I started a project several years ago that took off. It wasn't meant to be a business at the beginning but once it started getting traction I slowly devoted more and more time to it. It was "profitable" from the first day; the Adsense ads more than made up for the costs of hosting it and the initial design work. I programmed it myself so there was no development cost. From the beginning it snowballed. It had a thousand users the first week, ten thousand the first month, and 50k users 3 months in. It was at that point that my amateur coding got in the way and the server crashed and burned. By this time the business was making about $300/day in advertising. The costs were basically zero (a single virtual server + me part-time while I was still in school). In retrospect this is the point I wish I had dropped out of school, raised some funding, and started building a development team. But I didn't; I read up all I could on scaling and hacked together some more code. That helped the project grow to a million users by the end of the first year. By this time I had added in for-pay features to the free product to augment advertising and was making well over $1000 per day. I started plugging some of this into advertising to accelerate the growth but most of it was being distributed to me as the only shareholder. Things were going peachy until the servers crashed again. Again, I read up on scaling, bought a couple hours of consulting time, and patched things up. Within a few months the advertising spend had paid off and at the peak the project was raking in $20,000/day (most funneling straight back to me since at this point it was just me [still part-time] and a couple of part-time customer service reps). This was where the project hit its peak of about 1 million monthly actives. And, of course, the servers tanked again. This time by the time I was able to get things stable again the market was not as good and we weren't ever able to get back our exponential growth. I wish I had at the very least "gone for it" and plugged the profits back into the business to hire people to help me. It was about this time that my competitors were discovering the same things I had been experiencing (easy viral growth, cheap user acquisition) and raised about 100 million in VC funding to buy up and saturate the market. Long story short, we stagnated and slowly declined (no longer able to compete effectively with our newly extremely well-funded competition). Our competitor who raised 100MM in VC is now a public company with several billion in market cap, and there are several others who took a similar path that are worth in the range of a billion as well. By the time I decided to hire and build a team it was too late to make much of a difference. I made a couple million bucks and had a fun ride but I'm still kicking myself for not seizing the opportunity to go all-in while the window was open. We're now playing catch-up but the market is more fully developed now and it's harder for underdog players to get an upper hand.
• gyardley 13y ago
  It sounds like you waited a little too long before trying to arrange a soft landing, so now you're probably going to have a hard landing. In this situation, I would tell your investors immediately that their investment is going to zero if you can't manage to sell the company for the value of the team - and that in order to even try to sell the company for the value of the team you're going to need a bridge loan, because otherwise the team is going to evaporate. If you can get a month's worth of bridge, get all your investors to start looking for a home for the team and concentrate solely on that. If you can't, tell the employees to start job hunting and use the small amount of money you've got left to wind things down gracefully and sanely. Winding things down on your own without the help of a lawyer is a pain in the ass, and lawyers cost money.
• mck- 13y ago
  These are the stories that matter more than the success stories we read every day on HN -- there should be more of these; this is reality -- great write-up :)
• cheez 13y ago
  And in 90 days, you will be served with divorce papers.
  • GuiA 13y ago
    Screw you dude. For someone with over 1k karma and an almost 3 year old account, you should know better than this. This is a community meant for us, hackers and entrepreneurs, to help and support each other out. Posting shit like this when a guy is exposing his deepest anxieties to the world and reaching out for help should make you ashamed.
    • cheez 13y ago
      It's the reality of the situation. Unemployed men or men who earn less than their wives are more likely to be divorced. He needs to manage the situation with his wife carefully. Don't show her that you are worried. Don't share your problems with her.
      • krichman 13y ago
        That's so cynical that it looks sarcastic. Isn't it far more likely to get a divorce if you are refusing to discuss problems with her? Holy hell. If this is what your relationships are like, you might want to look for different partners. Thanks for making me appreciate my wife that much more.
        • cheez 13y ago
          Facts are not cynical: http://healthland.time.com/2011/07/11/unemployed-men-are-more-likely-to-divorce/ http://healthland.time.com/2011/07/11/unemployed-men-are-mor... http://www.nypost.com/p/news/national/women_divorce_cur_SfyEHTdYT8khsy625mbJOL http://www.nypost.com/p/news/national/women_divorce_cur_SfyE... I know there are women out there who would not dump their husband like this. One of my friends who has been with his wife since they were in high school went through a very tough 5 years in his business while trying to make it. He lost hundreds of thousands of dollars which he never made back. His wife stuck by him the whole time and even helped him out. They just had their first child. You are right that the quality of partner is what matters the most. I suspect HNers on average choose a more morally upright class of women, however, I would still counsel anyone to be cautious about appearing worried to their wives. Me though... I like firecrackers. Will never marry.
• patio11 13y ago
  So, it sucks, but it happens, and it won't matter nearly as much in June 2014 as it seems to right now. Your co-founder will, hopefully, not find out about this through guessing "Is this my company?" on Twitter, but rather in hearing it from you. You may be heartbroken about it, you may cry a bit (totally OK). Then, you will put on your Responsible Adult pants, call your employee into the office, and tell them the situation. You will emphasize that it is in no way their fault. You will tell them the status of your future payments to them (you can make them -- good), and instruct them that they have no job now other than lining up their next gig, and that you are totally at their disposal for making that happen. First among all things you take care of your employees -- they have the worst risk situation of anyone involved. You will then tell your investors that you're failing and will be proceeding to wind up the business in an orderly fashion. They probably already know this. None of the ones who you care about will hold it against you -- "this is the nature of the business we have chosen." Some of them may likely attempt to invest in your endeavors in the future, if you decide to go down that route. You will then draw up and execute on a plan to wind down the business in an orderly fashion. Give your customers a window on their apps going dark, if appropriate. Turn off new signups now. Turn off ability to take money now, unless it is absolutely required to continue paying your employees. There likely a small mountain of very boring administrative work here -- your lawyer and accountant can help you through it. After this is over, you'll probably be very stressed. That is fine and natural. You're in the hottest market ever in terms of hiring right now. If you want a job immediately, you will have many offers for it. "Built a company with real revenues from nothing. Got into an accelerator. Took funding. It didn't work." is enough of a resume to get you an interview at any number of places. If you need introductions, you are probably well-networked enough to get them, but if for some reason you want more drop me an email. Your designer co-founder will have, similarly, no shortage of offers. Like tptacek says below, this will not meaningfully hurt your chances of creating a business later. You've likely learned plenty through the experience. It sucks. It will be better, very soon. You don't have to be scared: this is routine and, while it doesn't feel like it, you're actually in very good position, both absolutely and relative to many other people.
  • dylangs1030 13y ago
    Damn good, Patrick. This is probably the most powerful advice delivered in the most gentle way. It's inspiring even for people intimidated by the prospect of beginning a startup.
• pajop 13y ago
  this thought popped into mind - don't be a zombie startup http://www.daniellemorrill.com/2013/03/zombie-startups/ http://www.daniellemorrill.com/2013/03/zombie-startups/
• mamcx 13y ago
  What I see of this, is similar to my experience in be part of the "startup"-machine business. I won a award in my country (for my business idea), and participate in several contest where I land in the finalist. What tremendous waste of time. Triying to chase the "investor money" was the most damaging thing I do. I waste months on that. Building investor plans, do meetings, and work on CANVAS and other methodologies where some company, that get the real $$$ to "create startups", guided each of us to the path of silicon valley..yes, rigthhh.... At the end, I understand that we was part of a masterplan, where the money was on the big players sucking from the gov funds on build startups, with pre-pakaked advice and zero of the real value that we need. I think that YCombinator is the only that truly make sense, and the rest copy-cats are more a waste of time than not (even with good intentions).
• eclipxe 13y ago
  Any proof this is real?
• m3mnoch 13y ago
  ha! can a guy get a "hello fucking echo chamber!" up in here? m3mnoch.
• bomatson 13y ago
  Thanks for sharing your story. If you need someone to chat with: http://www.startupsanonymo.us/ http://www.startupsanonymo.us/
• iblaine 13y ago
  I had a moment just like this. We would be short $20k on payroll and the founders and myself and to come up with the difference. That sucked. Reality really sinks in when you are not in a good place to write those checks but you write them anyways. It was the responsible thing to do. Also, don't be a dick. Inform your employees that they need to keep their options open. My biggest regret was allowing my VC to convince me to not worry about money...but you live & learn.
• KenL 13y ago
  This is a fantastic headline and a good writeup, but ... why? Perhaps it's cheaper than a psychologist, but in the process of being "stretched so thin" why are you spending time and effort into something that won't materially help you. Dude, you have 30 days left. Don't be one of those football teams that gives up with :30 left on the clock. If you're going to lose anyway, throw the ball into the fucking end zone and try your hardest until the game's officially over. Use your name. Tell us and the world about your company. Ask for ideas and help. Take advantage of this medium to try and turn it around with a Hail Mary pass instead of quitting early. There may be plenty of time for psychoanalysis in August, so what have you got to lose? There are already 148 people on HN who care enough to comment. And thousands of readers, all of whom are tech savvy and perhaps more. You just never know. Even if it fails, you'll go down a fighter instead of an anonymous blogger bemoaning his bad fortune. Which would you rather be? Good luck, Ken
• oaktowner 13y ago
  He has time for running? I think I know what's wrong.
  • jng 13y ago
    I don't think you know. 1h of running could double the productivity of the hours you put in afterwards. And, most probably, the issue stems from product/strategy decisions. Not from spending 1h a day running and clearing his body and mind.
• SurfScore 13y ago
  Elon Musk put his last $3 million into Tesla to make payroll a few years ago.
  • andy_boot 13y ago
    That guy has balls of steel and fame to fall back on. While I think Elon is a man to be admired I wouldn't recommend copying all his decisions.
    • krichman 13y ago
      Also survivorship bias; we wouldn't be hearing anything about Tesla if it had failed normally.
• nickfrost 13y ago
  If you let us know who you are and what company you're working on steering in the right direction, I'm very certain there are people, like me, that would love to help you in any way. 1. I work for a company that can alleviate any back-office pain you have, setting you up on the proper infrastructure, rather than startup blood-sucking solutions like BackOps, TriNet, and Algentis. 2. I have industry connections to help you find mentors, funding, or guidance of any kind. 3. I don't know you, but I am passionate about you. You're a founder and I believe you have great value to offer the world. With this startup or any other you create in your lifetime. 4. You've drummed up great awareness for you and your product with this post, so why not use it to get feedback on your product, with hopes to continue developing something customers want. That's all I can say. I wish you the best, and hope you're not too discouraged if things don't work out with your current startup. You have the spark. Keep it alive, and build something of value. Cheers :)
• pbreit 13y ago
  Is returning to what you were doing in the beginning not an option?
• jjmardlin 13y ago
  wow, hidingmyname, if nothing else, you've inspired one of the most positive and supportive threads I've seen on HN (don't bother checking, I'm still a pseudo-noob). I can only echo what many others have said in one way or another: be at integrity with yourself, do what you can to support your team and maintain your honour, and I believe that you will look back at this, in 6 months, with some kind of gratitude. You lived it. :)
• anigbrowl 13y ago
  If you can't make payroll, stop staring at the ceiling in your bedroom and feeling so alone, while you plan how to fire your expensive first hire. Hold a company meeting, put the accounts up on the wall, explain that you have almost no money left and the company is about to go broke. Be willing to consider ideas, but don't string people along so you can postpone pulling the plug on them. It's possible that your employees (individually or collectively) will come up with solutions that you can't; your lack of transparency about the firm's health may be part of your problem.
  • sebkomianos 13y ago
    That. Since you have pretty much accepted that you failed as the "leader" of your crew, why pretend you are one now? Have a meeting with the guys that do work for your company/product first, LISTEN to them, and then take it from there.
• timc 13y ago
  sorry for what you are going through. happy to try to be of help if I can. http://hall.com/tim http://hall.com/tim
• fairywings 13y ago
  That's unfortunate but this is business, most successful people go through this many times. Best thing to do now is man-up, spend your last dollars taking your guys out for a drink and try and leave it with relationships in tact. Best of luck on re-entering the workforce and don't lose hope. You may find an opportunity you can get started in your spare hours without all the extra sparkly bits that brought you down this time.
• _niss 13y ago
  I think the team should understand you and stand-up with you. Accepting a job in startup means be ready for an adventure where things like this could happen. Talk to them and look for a key feature or PIVOT
• dpanah 13y ago
  This one got me out of just about everything, and it's very very true, good luck; Never, Never, Never give up. Winston Churchill
• kxu 13y ago
  Well, lesson learned. > What happens next? Hard to tell without precise context, but: as far as I can tell, your company just needs money (paid customers I guess); you cannot be good at your (too many) jobs? Fine, if your company is B2B there is only 1 job to get done right now: business development, if you cannot do it yourself, let's find the best business dev guy you can in your industry. BTW "biz dev" is the only kind of guy I can sincerely hate and love at the same time; that's how I recognize them. My 2 cents.
• radiusq 13y ago
  >I became the guy who would “do-it-all”. Biz Dev, check. Product Management, check. Support, check. Accounting, check. PR, check. Ad Copy, check. Development Lead, check. While he took complete ownership over design (and really excelling at it). Thats where you failed. You cover all that ground while he worries about.. design? Thats not going to get you to where you need to be. Sorry.
• infoseckid 13y ago
  Don't get me wrong but this is the classic example of "following the herd" of current gen startups --- too much focus on pleasing investors, raising money, eventually realizing you've relinquished control == don't feel sense of ownership in the company, straying from the vision or not getting enough traction, founders breaking up and then the ship sinking!
• jayseattle 13y ago
  Does the poster list the startup (url or otherwise)? Sorry may have missed this...
• graycat 13y ago
  This thread does a lot on asking what is a start up and what about taking equity funding, e.g., from a venture capital firm, versus remaining a company 100% owned by the founder(s). The discussion keeps trying to find simplistic patterns that cover most of the cases. I claim that such new businesses (start ups) are so varied that we should not look for simplistic patterns and, instead, just look at the businesses themselves. Here is an approach to some insight into the growth of a new business: Commonly the intended or expected growth is modeled with a spreadsheet with, say, one column for each planning interval (maybe one month) in the plan of growth, but long ago I decided just to use an interpretive procedural language with, essentially, a Do-loop with one pass for each planning interval. So, of course the Do-loop has some variables. So maybe we have some variables for business decisions, for random exogenous inputs, and for the state of the business. Considering all of these variables and the business dynamics during each planning interval, we see that we can have a lot of complexity. In particular, in some of this complexity, we can see that the business can run short of various necessary resources such as management time, capacity of the server farm in users served per second, disk space used by the database software, time to hire and train staff, floor space used by the staff, rate of writing software, ads served per second, revenue from the ads, delays in getting paid by the companies running the ads, etc. So, there are lots of 'constraints' or limitations which can slow the growth of the business. Generally, if usage and revenue are growing slowly and the free cash is low, then we react by slowing down on hiring, buying servers, etc. Yes, it can be that a big check of equity funding can open or relax many of these constraints. But it may be that margins and free cash flow are nicely high and the constraints that are 'tight', e.g., management time, rate at which can bring on more software engineer staff, are not relaxed by equity funding. Programming a multi-interval growth model makes these points quite clear. Just envisioning such software should, for the HN audience, also make the points plenty clear. So, net: We can't generalize. It might be that for some start up, equity funding cannot help its growth because cash is not nearly one of the tight constraints and, instead, the start up might be able to grow as fast as possible just organically. Common? No. Possible in principle? Yes. Possible in practice? Maybe, but don't try to generalize or theorize. Instead, if have such a case, then recognize, accept, and run with it and tell the people with equity capital "no thanks". So, really, we can't generalize: Organic growth might be for a business that has just one pizza shop and will never have more, a business selling donuts that opens a new location once a quarter, a Web site that is a lifestyle business and gives the sole proprietor and owner $5 million a year in income but is not growing very quickly, or a similar Web site business that is growing rapidly, as fast as the time of the sole proprietor permits. Such an organically grown business might be the next "big thing", worth $400+ billion, depending just on the business, say, the Web site, how many users like it how much, and how much free cash flow the revenue from the ads generates. In general we can't say and have to look at the particular business. But, we can draw conclusions from what was common in the past? When looking for "the next big thing" (NBT), mostly just simple empirical patterns from the past are next to useless, deliberately, even nearly necessarily, so since the NBT might be -- should be, likely is -- quite new and different. So, again, when looking for NBT start ups, we have to consider them one at a time with little hope of good help from past, simplistic patterns.