12 ms·

Today my startup failed

342 points by jc4p 13y ago

fidotron 13y ago
I think it's important to distinguish between having an audience and having a market. As is fairly well understood, it's possible to have very small audiences that monetise effectively, and very large ones with next to no spending. One more subtle problem is that products aimed at highly internet savvy westerners seem less likely to stand a chance of making money, as those people are precisely the least likely to spend anything. Reddit has a similar disparity between audience size and ability to get money from them, but aiming at the 4chan crowd strikes me as a recipe for pain. Hopefully eventually he'll find an actual market.
pearjuice 13y ago
For someone who's running the garbage bin of the Internet, Chris is really down to earth.
- eli 13y ago
  If you're curious, DailyDot published a lengthy profile of him a few months ago that wasn't bad http://www.dailydot.com/business/4chan-10-years-christopher-moot-poole/ http://www.dailydot.com/business/4chan-10-years-christopher-...
- brokenparser 13y ago
  Are you referring to 4chan? If so, I think Twa^Hitter is far worthier of that title.
  - Kiro 13y ago
    Twa^Hitter?
    - nemo1618 13y ago
      ^H is the escape sequence for the backspace character. Since the days of BBS it has been used to comedic effect in the manner you see here.
      - typon 13y ago
        I guess different people have different definitions of the word 'comedic'.
    - cbr 13y ago
      ^H means "backspace", so "Twa^Hitter" means <strike>Twatter</strike> Twitter. </joke_explainer>
  - onedev 13y ago
    It took me a really long time to understand twitter, but now that I finally get it, it's a fantastic service. I quit Facebook and pretty much only use Twitter now. It's a fantastic news source.
- diydsp 13y ago
  This has been said elsewhere, but outside of /b/, 4chan is quite a normal board. I don't read the whole thing, but in my experience, /fit and /diy are fairly civil and often work-safe. /v seems about as good as any video game nerd discussion can get, especially since Quentin and his Diamond Dogs have been rescuing everyone. I have been very surprised to not see very many people taking up 4chan's self-serve advertising. The audience on 4chan is pretty clear: video gamers, lovers of Japanese culture, artists, trustafarians and paranoids. They spend money on games, computer equipment, plastic figurines, art supplies, costumes, body pillows, music, camping equipment, tools and knives.
  - Grue3 13y ago
    You are probably the only person on the Internet who has ever said anything positive about /v/. And no, other boards are just as shitty. Ever tried /pol/?
mildtrepidation 13y ago
It may seem surprising that a seemingly successful product could fail, but it happens all the time. Although we arguably found product/market fit, we couldn’t quite crack the business side of things. Hopefully people will read into this and learn that building a product without figuring out how to make money and just hoping it becomes obvious -- or that someone will acquire you -- is NOT a business model.
- freehunter 13y ago
  I would say that many people would disagree. Launching without a profitability model is what a lot of startups do, and some of them are successful. I'd like to see numbers on how many of those types are successful versus the startups looking for profit to begin with. I would argue that it is A business model. The debate would be around whether or not it's a good business model. I guess as long as you're honest with yourself and your employees, aiming to be acquired as a profitability plan is perfectly valid.
  - mvkel 13y ago
    "aiming to be acquired as a profitability plan is perfectly valid." Getting acquired and becoming a cost center for another organization is not how I'd define success. Yes, companies like this exist, but they typically are in the news because they're the exception to the rule. For any sustainable business, the obvious part has to be how it makes money; the tough part is building it in a way that captures the customer.
    - freehunter 13y ago
      Not everyone wants a sustainable business. Some people just want to get acquired. This was even mentioned in a business class I had in the 90's. Did you make money? Yes. Did your investors get their return? Yes. Sounds like a successful exit to me. Every week I'm seeing an article about Google/Apple/Microsoft buying a small company that had no hope of being profitable on their own. Everyone defines success on their own terms.
    - GauntletWizard 13y ago
dchuk 13y ago
I feel like one of the problems moot will always face, simply because of his legacy, is that his core userbase with any venture will end up being those who frequent 4chan...possibly be the hardest to monetize group in the world. While the app was successful in the sense of popularity, it was not successful in the sense of profitability. That line is far too blurred for far too many startup founders nowadays.
- AznHisoka 13y ago
  That's a trivial problem to solve. Simply don't even mention you're the founder. Or demote yourself to a tech lead, or someone. It's only a problem if you glamorize yourself and jump and shout to everyone that you're the founder of so and so.
  - dchuk 13y ago
    Yeah but simply mentioning his association with a project will lead to 10s if not 100s of thousands of users basically instantly. They're just not the kind of users who you can monetize easily.
    - ben010783 13y ago
      Having Christopher Poole as CEO probably helps raise money too.
  - MrJagil 13y ago
    There's also a question of ego, greed and fear-of-failure here. I mean, I can imagine it being pretty damn hard to ignore the fact that you have a "Gain 100.000 Users Instantly" button(that being a tweet, blog post or whatever), right at your finger tips.
- anthony_franco 13y ago
  This is a plus, more than anything. The ability to easily seed any community-driven site is a godsend. Whether they can monetize them or not, it helps jumpstart the activity so they can then focus on bringing new, outside users that can then (hopefully) be monetized. It solves one half of the chicken-egg problem.
AznHisoka 13y ago
He needs to move all his infrastructure to OVH servers before he can talk seriously about 'keeping the lights on' as long as possible.
- georgemcbay 13y ago
  I have no idea how things work with moot's company, but depending upon how your backend is built, moving it can be rather a lot of effort, effort which will be in short supply as people involved with the company are now suddenly very busy looking for new employment. We went through something similar as chumby industries was dying where a lot of effort near the end (and even past it) went into network traffic optimization aimed at "keeping the lights on" as long as possible past the retail death of the product. Significant dependencies on Amazon's AWS/S3 infrastructure were built into our backend at that time, which limited our effective ability to host on something cheaper without making changes much larger than were warranted to make on a volunteer effort for maintaining a dead service. TL;DR/Lesson learned -- It is a good idea to implement your backend services in such a way that they could, in the future, be deployed on vanilla Linux hosting if need be, even if you currently rely on some "cloud" provider with its own APIs.
- latj 13y ago
  They could return some money to investors.
- gaadd33 13y ago
  Would that be cheaper than putting it on a spare server in the rack of servers that power 4chan?
jc4p 13y ago
Putting who he is aside, I think the very tough realizations they made apply to a lot more than just DrawQuest's situation: > As we approached the end of our runway, it became clear to us that DrawQuest didn’t represent a venture-backed opportunity, and even with more time that was unlikely to change. It takes a lot to decide that you should kill something rather than try to funnel more money into it without having an end-game set up.
- dclara 13y ago
  "It takes a lot to decide that you should kill something rather than try to funnel more money into it without having an end-game set up." Correct. But you may miss out one point: not every innovation or successful apps is able to meet this criteria. I believe as an online app, they've already stretch to its most, even received VC funding in the first place. Apart from the planning for exit earlier, they are quite successful. Apps have very little room to be profitable due to the high competition. I was in a seminar when the presenter did a survey to count how many people have 5 apps installed: majority. How many people have 20 apps installed? 1. The funniest thing is the "1" said, I barely use my smart phone. Everybody was staring at him, why? He said I like to use computer. :(
  - JacobAldridge 13y ago
    When we launched EveryDayDream Holiday as a daily email thing, so many people came out of the woodwork and declared "You should make it an App!" When I asked all of them (yes, anecdotal) how often they used Apps versus how often they checked email, a large majority replied ... "Yes, but people make lots of money out of Apps." Not that we made money out of email either, of course.
    - dclara 13y ago
      Yeah, it's like an illusion. Some early apps did make a lot of money out of it though. Now it's like overflooded, and everybody expects free apps for sure. When they suggested you, they only care about whether they can get it on smart phone. Email actually reaches broader, but just like you said, it's hard to make money either. So a real business model comes out from intensive marketing research and practice, especially experts always suggest to create a business plan including marketing plan for any business.
aditya 13y ago
I wonder if moot would've been able to turn DrawQuest into a revenue generating product if he'd had more runway? I guess my question is this: what is the difference between DrawSomething today and Google and Twitter before they started making cash? All three seem to have great usage and engagement? Is it just market size that prevented more capital being deployed? edit: I meant DrawQuest but wrote DrawSomething, thanks for the bug report tricolon :)
- mattzito 13y ago
  I suspect that most general interest applications could generate revenue eventually with enough cash put in (the exception being fundamentally flawed business models - "let's sell bags of rocks over the internet to children!"). But the curse is that the longer your runway, the more cash you've raised/invested, the longer payoff time, and the longer you/your investors have to wait to get there. That's why shutting down and cutting your losses is worth it in a lot of cases. If you don't see a clear path to the hockey stick or to breakeven, you're better off closing the doors, even if you can raise a little more money. And I would say that the difference between DrawSomething and Google and Twitter is that the upside potential is correspondingly larger. Search is ubiquitous, twitter is a communications mechanism (albeit one I never "got" or cared for). DrawSomething is more of a game, and while games can definitely make money, it's a highly competitive space with lots of churn. It's just less appealing from an upside potential. So, when you solve really big problems, you might be able to raise more capital for a longer runway, because the risk/reward is greater. I suspect that DrawSomething was cool, users liked it, but that it didn't have the upside potential that something else might have. I give Chris credit for recognizing this and walking away - and for all we know, there might have been more money to raise, but at terms he didn't care for. Which is totally reasonable.
  - cbr 13y ago
    the exception being fundamentally flawed business models - let's sell bags of rocks over the internet to children! But yet it exists! http://www.kidzrocks.com/ http://www.kidzrocks.com/
  - ama729 13y ago
stesch 13y ago
Oh, shit. Our startups should have been ready today? Shit! I failed, too. I haven't even started yet!
swayvil 13y ago
Convert the magical subtleties of drawing into a shallow engineering exercise. Throw away your magic lump of charcoal and replace it with this species of narrow cerebral wasteland that everybody and his dog is getting skinny on these days. Just plastic the fuck out of the whole deal. What's not to like? Fuckin diet coke and fleshlights. Ice Nine.
- AznHisoka 13y ago
  Um.. this is not Hipster.
  - swayvil 13y ago
    Pardon my fat geeky autistic ass. I meant to say "beep boop fart. does not compute!"
- pc86 13y ago
  I truly have no idea what you're talking about.
  - diydsp 13y ago
    I think he's saying computers don't add value to the practice of hand-drawn media. And that everyone who tries to monetize traditional practices is a sellout. And it's probably moot himself. Everyone knows he is the master troll.
- slashdotaccount 13y ago
  That's a fucking beat sentiment. Keep it real, brotha.
lafar6502 13y ago
Oh, i think the investors need therapy more than these enterpreneurs. But did any of these anonymous 'investors' write how bad it was to see his pile of money being burnt?
- JDDunn9 13y ago
  Investors expect to see most of their investments fail. That's built in to the business model.
  - lafar6502 13y ago
    So it must be built into startup model too. Otherwise investments wouldn't fail.
geolisto 13y ago
Failure is one of the best educators in business. Get back in the game and start another company.
- quadrangle 13y ago
  Why? Starting companies just for the hell of it is the worst part of start-up culture. Go find something actually useful to do. The world has tons of needs but that doesn't include having yet another random startup with no deeper mission than being successful.
billnguyen 13y ago
Love seeing these posts but without any details on what he was doing on the "business side" that failed its unfortunately not very useful for the reader.
Kiro 13y ago
Is it bleeding money? Otherwise I don't understand why anyone would shut down a service with 25,000 uniques daily.
- josh2600 13y ago
  Do you think of that as a large number? What would be a number that would cause you to shut down? I'm not trying to be facetious, I just think that 25,000 uniques/day in a consumer play is not a lot. Do you feel differently? If so, can you provide some context for me to help understand your position?
  - erichate 13y ago
    That is definitely a healthy number for a mobile app / game, something that can be leveraged into a new product. With the $$ amount that advertisers are paying for mobile installs, a app with good engagement and viral reach should have no issues being monetized. If their goal was to build a company around 1 app then that could be their issue but doesn't seem like the kind of app that could grow to support full team indefinitely.
DanBC 13y ago
moot - what was the worst part of the community and how was that handled? And what was the best bot of the community, and do you have any ideas how that was fostered and encoraged?
erichate 13y ago
I am an android dude so couldn't download the app but am curious as to how the app is currently monetized and what the daily installs look like. With high CPMs on mobile decent ad strategy should be able to monetize that app quite well. Or even a virtual currency of some kind of drawing tools, bigger uploads etc. Should be more than enough revenue there to keep the lights on and build out a new app...
- mentos 13y ago
  I assume they pursued those things but still wasn't enough? Otherwise how else were they trying to monetize?
Phil_Latio 13y ago
Canvas was fun. While I don't know the details, imo it failed (at least community-wise) because they made some strange changes for strange reasons (removing so called sticker-rain, removing audio-remixes, etc). The weeks after these changes the user base dropped largely and once that started there was obviously no coming back due to massive decrease in activity on the site that would scare away new users. Myself included: Previously I was spending at least 1 full hour a day on Canvas for about 5 months straight and just some days later it went down to like 5 minutes a day before leaving completely. To this day I fail to see how they ever wanted to monetize Canvas. I think that was the real issue here. It looks like the site had a few hundred uniques a day for the last couple of months and the servers are still running... http://www.alexa.com/siteinfo/canv.as http://www.alexa.com/siteinfo/canv.as
- dclara 13y ago
  I think what you said is very typical. Apps are like mini toys or online games. People lose their curiosity very soon since there are so many free choices out there. We cannot expect or take it too seriously for the long run. Being adopted to a certain extent as Canvas DrawQuest is good enough.
siliconc0w 13y ago
Mobile gaming is about risk management. There are a lot of failures but the successes can be huge and pay for everything else. You try and try again until you strike the rich vein of players who are actually willing to sink money into virtual crap. Even with incredibly coercive game design and analytics - finding and engaging these users is hard.
- dclara 13y ago
  Expectation must be adjusted. A lot of apps and even real world products should shoot for a short term profit and gain in before the majority of people lose the curiosity and become tired of it.
diestl 13y ago
Startup delusion is the new gold rush, the only ones making money are those selling the dream. As soon as I see someone using startup buzzwords like runway, pivot etc I see a sucker who is has stars in their eyes.
- jgh 13y ago
  Except Moot is the guy who made 4chan
udev 13y ago
I read many post-mortems, but this one, for some reason, struck me as being very frank and unforgiving in its assessment.
- Phil_Latio 13y ago
  Still kind of shady (or is it just me??..): When they launched DrawQuest, Canvas was already dead. However they did not acknowledge this in any way. Today Canvas is still online while not having any proper audience or any changes to the site for like 2 years. All in all they got like $3.6 million for Canvas in funding without any income. He writes it himself: > we created DrawQuest after the failure of our first product, Canvas Why keep it online for another 2 years if it failed? I don't get it.
  - anthony_franco 13y ago
    Not sure about his case, but in my case I still keep my failed startup online (http://friendcameo.com/ http://friendcameo.com/) Mine failed in the sense that there's no way of growing or monetizing it in a way that's worth my time and effort. But at the same time, I can sometimes run experiments/surveys on it that allows me to learn and apply finding to other more successful ideas. I'm guessing Canvas is along the same lines.
ojbyrne 13y ago
Surprisingly gracious and heartfelt.
- udev 13y ago
  Exactly. I got the same impression.
avenger123 13y ago
"As we approached the end of our runway, it became clear to us that DrawQuest didn’t represent a venture-backed opportunity, and even with more time that was unlikely to change." I believe this is the heart of the message. It looks like there was no revenue generation model that could give back the money invested ($3.6 million) and provide a real return. The application is successful and there is a large user base. Let's assume DrawQuest is able to make a profit of $200,000 a year on revenue of $400,000 based on some simple changes to allow users to pay for premium features. For a very small company with 2-3 people, this may be enough to keep going. Now, I don't know what these numbers can really be but I would imagine for a bootstrapped company it would be viable. It's unfortunate that this business "failed" because the profit it can generate just isn't enough for the investors and the founders. It would be nice if instead of shutting it down, it's handed out to others that will be happy with its lower profit potential.
- benjaminwootton 13y ago
  Seems like you have to be really careful with VC as it can reframe a success into a huge failure.
  - sliverstorm 13y ago
    But if you are making less than pennies on the dollar, was it ever a success anyway? Having users and traction is not success. Plenty of companies get both users and traction, all they have to do is tolerate negative profits...
    - ForHackernews 13y ago
      shrug It seems to work for Amazon. All you need is patient investors.
      - sliverstorm 13y ago
        Amazon is somewhat of a different story; Amazon is enduring small profits by choice in a bid for the future, and investors feel like they see that future, that tremendous potential. The way they are playing it, IMO Amazon is still neither a success nor a failure. Their story is still being written, as they position themselves for whatever move they have been preparing for the last decade.
dodadmin 13y ago
I help run a site called Doodle Or Die (http://doodleordie.com http://doodleordie.com), which is very similar to DrawQuest. Much like them; we barely cover our costs. But we've largely automated away most human effort so that we can keep the site going for our community while we figure out a brighter future for it. While our game is similar; I think the way we have approached it from the business standpoint is more realistic. We fully bootstrapped it ourselves and never put ourselves in a position where it had to make money. All of the people working on it still have day jobs. We see Doodle or Die as a great side project that we will continue to work on and maybe we will get it enough traction to attract a buyer. As much as we want it to be the next DrawSomething we knew that it would be a hard road towards that and therefore we were never holding our breath. There is something to be said for going out and taking the bigger risk like DrawQuest did. But I think we have all agreed to save our bigger risks for bigger opportunities (i.e. we are all working at successful startups outside of Doodle Or Die that have a much better future). We never took the risk; and that's why you don't see us writing a blog about our failure. With all that being said we welcome DrawQuest users to try out Doodle Or Die.
- erichate 13y ago
  That's a nice site, have come across it before and had a couple laughs. I too took an interest in this thread because of involvment with a product that shares some similarities (http://www.freeriderhd.com/ http://www.freeriderhd.com/). Unfortunately one thing is likely, it won't become the next draw something if it is being tackled as a side project and not full time. I commend you guys for bootstrapping it but if you aren't in a situation where you have to make money from it that removes a big motivator for success or even failure for that matter and you just end up waiting on or hoping for better days ahead which likely won't come without some hard dedicated work.
  - dodadmin 13y ago
    Awesome work you have done there with Free Rider. I think I can play that for hours. It is true that dedication is necessary when doing a startup. But I guess my point is that we must prioritize our dedication. So far, the other startups we are currently working for have a much higher chance of success than the really fun drawing game we created. When evaluating a startup you must look at how big the thing can be if everything goes perfect. It is obvious moot saw that with 4chan. And I think there was a good opportunity there with Canvas. But with DrawQuest I think the opportunity was smaller and therefore a different model of dedication (which he seems to be moving towards) might be more appropriate. Every week I want to start programming on a new idea that pops into my head; and many times I do. But prioritizing which of those stay as thoughts in my head, side projects, or companies is something I am always evaluating. Given what Doodle Or Die is and what it can be; I think a bootstrapped side project approach was best. DrawQuest would be a great side project success story if it stayed that way. But then again, it probably would have not even been as successful as it was without the dedication he put forth in a full-time way. In short, I have concluded that I know nothing and that we are both right. I guess the choice of which way to go depends a lot on the person and the circumstances around them. I think I put on my Captain Hindsight (http://doodleordie.com/c/1qLInbnKCE http://doodleordie.com/c/1qLInbnKCE) goggles for a second there.
jsemrau 13y ago
Just a thought exercise. How many cars would Mercedes-Benz sell if they would give out the cars for free?
- dclara 13y ago
  Good point. But there are numerous apps available, are you going to choose anything not free? Actually I did once. I cannot find a good background for my Nook tablet, I spent $1.99 to buy one since Nook does not open to Google Appstore. But how can you make your app being listed on the top? So I think the apps builder are more for fun than making money out of it.
andrew_wc_brown 13y ago
http://memegenerator.net/instance/45092497 http://memegenerator.net/instance/45092497
Sindrome 13y ago
How do I created successful startup? - Business Spiderman
Keyframe 13y ago
Damn, I have a draft of an idea that is similar to this that I want to dedicate my time to later this year. I haven't even heard of DrawQuest, and it's not essentially like it, but is rather similar. However, I can see at least 10+ ways to monetize it. I wish there are/will be more details why this failed.
baldajan 13y ago
I actually run a startup (in someways similar to draw quest) and was constantly told it is a lifestyle business; but I've only recently realized it doesn't have to be. That model is difficult to find, and will seem all too obvious once it's discovered (look at Facebook or Twitter). I believe if moot had cracked it (that model) and had sustainable week over week growth, draw quest could have survived. I was once told by the CEO of Kik, it's a lot harder to get to 100 million users than it is to get to a 100 million dollars. I couldn't agree more.
dclara 13y ago
What a splendid marketing campaign for attracting new users to visit 4chan? While we are busy discussing about the failure or success, while we are feeling the ups and downs as if we are experiencing, 4chan is way bigger than the two apps. Why whining? It's a joke. But now I got caught by 4chan. I became one of the unique million visitors of it. From this perspective, I fail forever, because I don't have this level of marketing skills. But hopefully, I have better product to show. http://kck.st/JNqv8z http://kck.st/JNqv8z
deleted 13y ago
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jmnicolas 13y ago
It never cease to amaze me how in the start-up world people can "loose" millions and nobody cares. It's like free money. IMHO the second start-up bubble is about to pop.
jackgavigan 13y ago
I have a thesis that the success of startups that operate in a market with strong network effects is often more about luck than skill and that, therefore, repeat success on the part of the founder(s) is by no means guaranteed. It's like when a first-time golf player scores a hole-in-one. If you try to get them to repeat the feat, they can't because they don't actually know what they did to get the ball in the hole - they just whacked the ball in the general direction of the tee. Now, take a thousand ball-whackers (startups) all targetting the same tee (market). If the network effects are strong enough, one of them is going to win simply by getting their ball closest to the pin. They don't have to actually get it in the hole - as long as it's the closest, the network effects will take over and push the ball into the hole. Result: The ball-whacker is perceived as a genius and VCs line up to invest in his next startup. However, if the first success was, indeed, down to luck, there's no guarantee that the second attempt will be equally (or, indeed, anywhere near as) successful. This isn't to say that all first-time hole-in-one ball-whackers are just lucky. Some are clearly naturals. The trick is distinguishing between the naturals and those who were simply lucky.
- JackpotDen 13y ago
  we're all a massive statistical experiment. in every stage of every thing.
pmcpinto 13y ago
Thumbs up for the honesty
Lionga 13y ago
With 25K DAU und 400K MAU you have 6% DAU/MAU which is the worst engagement rate i have ever seen (25% might be acceptable). Yet he says "Retention and engagement are great" Using 3.6 Million $ to build a simple drawing app probably worth about 3.600 $. "Our most recent product, DrawQuest, is by all accounts a success".
beauzero 13y ago
I would find it very helpful if you posted about how you went about the monetization decisions...both successes and failures. Thank you for sharing.
deleted 13y ago
[deleted]

342 points by jc4p 13y ago

I think it's important to distinguish between having an audience and having a market. As is fairly well understood, it's possible to have very small audiences that monetise effectively, and very large ones with next to no spending. One more subtle problem is that products aimed at highly internet savvy westerners seem less likely to stand a chance of making money, as those people are precisely the least likely to spend anything. Reddit has a similar disparity between audience size and ability to get money from them, but aiming at the 4chan crowd strikes me as a recipe for pain. Hopefully eventually he'll find an actual market.

pearjuice 13y ago

For someone who's running the garbage bin of the Internet, Chris is really down to earth.

eli 13y ago
If you're curious, DailyDot published a lengthy profile of him a few months ago that wasn't bad http://www.dailydot.com/business/4chan-10-years-christopher-moot-poole/ http://www.dailydot.com/business/4chan-10-years-christopher-...
brokenparser 13y ago
Are you referring to 4chan? If so, I think Twa^Hitter is far worthier of that title.
- Kiro 13y ago
  Twa^Hitter?
  - nemo1618 13y ago
    ^H is the escape sequence for the backspace character. Since the days of BBS it has been used to comedic effect in the manner you see here.
    - typon 13y ago
      I guess different people have different definitions of the word 'comedic'.
  - cbr 13y ago
    ^H means "backspace", so "Twa^Hitter" means <strike>Twatter</strike> Twitter. </joke_explainer>
- onedev 13y ago
  It took me a really long time to understand twitter, but now that I finally get it, it's a fantastic service. I quit Facebook and pretty much only use Twitter now. It's a fantastic news source.
diydsp 13y ago
This has been said elsewhere, but outside of /b/, 4chan is quite a normal board. I don't read the whole thing, but in my experience, /fit and /diy are fairly civil and often work-safe. /v seems about as good as any video game nerd discussion can get, especially since Quentin and his Diamond Dogs have been rescuing everyone. I have been very surprised to not see very many people taking up 4chan's self-serve advertising. The audience on 4chan is pretty clear: video gamers, lovers of Japanese culture, artists, trustafarians and paranoids. They spend money on games, computer equipment, plastic figurines, art supplies, costumes, body pillows, music, camping equipment, tools and knives.
- Grue3 13y ago
  You are probably the only person on the Internet who has ever said anything positive about /v/. And no, other boards are just as shitty. Ever tried /pol/?

mildtrepidation 13y ago

It may seem surprising that a seemingly successful product could fail, but it happens all the time. Although we arguably found product/market fit, we couldn’t quite crack the business side of things. Hopefully people will read into this and learn that building a product without figuring out how to make money and just hoping it becomes obvious -- or that someone will acquire you -- is NOT a business model.

freehunter 13y ago
I would say that many people would disagree. Launching without a profitability model is what a lot of startups do, and some of them are successful. I'd like to see numbers on how many of those types are successful versus the startups looking for profit to begin with. I would argue that it is A business model. The debate would be around whether or not it's a good business model. I guess as long as you're honest with yourself and your employees, aiming to be acquired as a profitability plan is perfectly valid.
- mvkel 13y ago
  "aiming to be acquired as a profitability plan is perfectly valid." Getting acquired and becoming a cost center for another organization is not how I'd define success. Yes, companies like this exist, but they typically are in the news because they're the exception to the rule. For any sustainable business, the obvious part has to be how it makes money; the tough part is building it in a way that captures the customer.
  - freehunter 13y ago
    Not everyone wants a sustainable business. Some people just want to get acquired. This was even mentioned in a business class I had in the 90's. Did you make money? Yes. Did your investors get their return? Yes. Sounds like a successful exit to me. Every week I'm seeing an article about Google/Apple/Microsoft buying a small company that had no hope of being profitable on their own. Everyone defines success on their own terms.
  - GauntletWizard 13y ago

dchuk 13y ago

I feel like one of the problems moot will always face, simply because of his legacy, is that his core userbase with any venture will end up being those who frequent 4chan...possibly be the hardest to monetize group in the world. While the app was successful in the sense of popularity, it was not successful in the sense of profitability. That line is far too blurred for far too many startup founders nowadays.

AznHisoka 13y ago
That's a trivial problem to solve. Simply don't even mention you're the founder. Or demote yourself to a tech lead, or someone. It's only a problem if you glamorize yourself and jump and shout to everyone that you're the founder of so and so.
- dchuk 13y ago
  Yeah but simply mentioning his association with a project will lead to 10s if not 100s of thousands of users basically instantly. They're just not the kind of users who you can monetize easily.
  - ben010783 13y ago
    Having Christopher Poole as CEO probably helps raise money too.
- MrJagil 13y ago
  There's also a question of ego, greed and fear-of-failure here. I mean, I can imagine it being pretty damn hard to ignore the fact that you have a "Gain 100.000 Users Instantly" button(that being a tweet, blog post or whatever), right at your finger tips.
anthony_franco 13y ago
This is a plus, more than anything. The ability to easily seed any community-driven site is a godsend. Whether they can monetize them or not, it helps jumpstart the activity so they can then focus on bringing new, outside users that can then (hopefully) be monetized. It solves one half of the chicken-egg problem.

AznHisoka 13y ago

He needs to move all his infrastructure to OVH servers before he can talk seriously about 'keeping the lights on' as long as possible.

georgemcbay 13y ago
I have no idea how things work with moot's company, but depending upon how your backend is built, moving it can be rather a lot of effort, effort which will be in short supply as people involved with the company are now suddenly very busy looking for new employment. We went through something similar as chumby industries was dying where a lot of effort near the end (and even past it) went into network traffic optimization aimed at "keeping the lights on" as long as possible past the retail death of the product. Significant dependencies on Amazon's AWS/S3 infrastructure were built into our backend at that time, which limited our effective ability to host on something cheaper without making changes much larger than were warranted to make on a volunteer effort for maintaining a dead service. TL;DR/Lesson learned -- It is a good idea to implement your backend services in such a way that they could, in the future, be deployed on vanilla Linux hosting if need be, even if you currently rely on some "cloud" provider with its own APIs.
latj 13y ago
They could return some money to investors.
gaadd33 13y ago
Would that be cheaper than putting it on a spare server in the rack of servers that power 4chan?

jc4p 13y ago

Putting who he is aside, I think the very tough realizations they made apply to a lot more than just DrawQuest's situation: > As we approached the end of our runway, it became clear to us that DrawQuest didn’t represent a venture-backed opportunity, and even with more time that was unlikely to change. It takes a lot to decide that you should kill something rather than try to funnel more money into it without having an end-game set up.

dclara 13y ago
"It takes a lot to decide that you should kill something rather than try to funnel more money into it without having an end-game set up." Correct. But you may miss out one point: not every innovation or successful apps is able to meet this criteria. I believe as an online app, they've already stretch to its most, even received VC funding in the first place. Apart from the planning for exit earlier, they are quite successful. Apps have very little room to be profitable due to the high competition. I was in a seminar when the presenter did a survey to count how many people have 5 apps installed: majority. How many people have 20 apps installed? 1. The funniest thing is the "1" said, I barely use my smart phone. Everybody was staring at him, why? He said I like to use computer. :(
- JacobAldridge 13y ago
  When we launched EveryDayDream Holiday as a daily email thing, so many people came out of the woodwork and declared "You should make it an App!" When I asked all of them (yes, anecdotal) how often they used Apps versus how often they checked email, a large majority replied ... "Yes, but people make lots of money out of Apps." Not that we made money out of email either, of course.
  - dclara 13y ago
    Yeah, it's like an illusion. Some early apps did make a lot of money out of it though. Now it's like overflooded, and everybody expects free apps for sure. When they suggested you, they only care about whether they can get it on smart phone. Email actually reaches broader, but just like you said, it's hard to make money either. So a real business model comes out from intensive marketing research and practice, especially experts always suggest to create a business plan including marketing plan for any business.

aditya 13y ago

I wonder if moot would've been able to turn DrawQuest into a revenue generating product if he'd had more runway? I guess my question is this: what is the difference between DrawSomething today and Google and Twitter before they started making cash? All three seem to have great usage and engagement? Is it just market size that prevented more capital being deployed? edit: I meant DrawQuest but wrote DrawSomething, thanks for the bug report tricolon :)

mattzito 13y ago
I suspect that most general interest applications could generate revenue eventually with enough cash put in (the exception being fundamentally flawed business models - "let's sell bags of rocks over the internet to children!"). But the curse is that the longer your runway, the more cash you've raised/invested, the longer payoff time, and the longer you/your investors have to wait to get there. That's why shutting down and cutting your losses is worth it in a lot of cases. If you don't see a clear path to the hockey stick or to breakeven, you're better off closing the doors, even if you can raise a little more money. And I would say that the difference between DrawSomething and Google and Twitter is that the upside potential is correspondingly larger. Search is ubiquitous, twitter is a communications mechanism (albeit one I never "got" or cared for). DrawSomething is more of a game, and while games can definitely make money, it's a highly competitive space with lots of churn. It's just less appealing from an upside potential. So, when you solve really big problems, you might be able to raise more capital for a longer runway, because the risk/reward is greater. I suspect that DrawSomething was cool, users liked it, but that it didn't have the upside potential that something else might have. I give Chris credit for recognizing this and walking away - and for all we know, there might have been more money to raise, but at terms he didn't care for. Which is totally reasonable.
- cbr 13y ago
  the exception being fundamentally flawed business models - let's sell bags of rocks over the internet to children! But yet it exists! http://www.kidzrocks.com/ http://www.kidzrocks.com/
- ama729 13y ago

stesch 13y ago

Oh, shit. Our startups should have been ready today? Shit! I failed, too. I haven't even started yet!

swayvil 13y ago

Convert the magical subtleties of drawing into a shallow engineering exercise. Throw away your magic lump of charcoal and replace it with this species of narrow cerebral wasteland that everybody and his dog is getting skinny on these days. Just plastic the fuck out of the whole deal. What's not to like? Fuckin diet coke and fleshlights. Ice Nine.

AznHisoka 13y ago
Um.. this is not Hipster.
- swayvil 13y ago
  Pardon my fat geeky autistic ass. I meant to say "beep boop fart. does not compute!"
pc86 13y ago
I truly have no idea what you're talking about.
- diydsp 13y ago
  I think he's saying computers don't add value to the practice of hand-drawn media. And that everyone who tries to monetize traditional practices is a sellout. And it's probably moot himself. Everyone knows he is the master troll.
slashdotaccount 13y ago
That's a fucking beat sentiment. Keep it real, brotha.

lafar6502 13y ago

Oh, i think the investors need therapy more than these enterpreneurs. But did any of these anonymous 'investors' write how bad it was to see his pile of money being burnt?

JDDunn9 13y ago
Investors expect to see most of their investments fail. That's built in to the business model.
- lafar6502 13y ago
  So it must be built into startup model too. Otherwise investments wouldn't fail.

geolisto 13y ago

Failure is one of the best educators in business. Get back in the game and start another company.

quadrangle 13y ago
Why? Starting companies just for the hell of it is the worst part of start-up culture. Go find something actually useful to do. The world has tons of needs but that doesn't include having yet another random startup with no deeper mission than being successful.

billnguyen 13y ago

Love seeing these posts but without any details on what he was doing on the "business side" that failed its unfortunately not very useful for the reader.

Kiro 13y ago

Is it bleeding money? Otherwise I don't understand why anyone would shut down a service with 25,000 uniques daily.

josh2600 13y ago
Do you think of that as a large number? What would be a number that would cause you to shut down? I'm not trying to be facetious, I just think that 25,000 uniques/day in a consumer play is not a lot. Do you feel differently? If so, can you provide some context for me to help understand your position?
- erichate 13y ago
  That is definitely a healthy number for a mobile app / game, something that can be leveraged into a new product. With the $$ amount that advertisers are paying for mobile installs, a app with good engagement and viral reach should have no issues being monetized. If their goal was to build a company around 1 app then that could be their issue but doesn't seem like the kind of app that could grow to support full team indefinitely.

DanBC 13y ago

moot - what was the worst part of the community and how was that handled? And what was the best bot of the community, and do you have any ideas how that was fostered and encoraged?

erichate 13y ago

I am an android dude so couldn't download the app but am curious as to how the app is currently monetized and what the daily installs look like. With high CPMs on mobile decent ad strategy should be able to monetize that app quite well. Or even a virtual currency of some kind of drawing tools, bigger uploads etc. Should be more than enough revenue there to keep the lights on and build out a new app...

mentos 13y ago
I assume they pursued those things but still wasn't enough? Otherwise how else were they trying to monetize?

Phil_Latio 13y ago

Canvas was fun. While I don't know the details, imo it failed (at least community-wise) because they made some strange changes for strange reasons (removing so called sticker-rain, removing audio-remixes, etc). The weeks after these changes the user base dropped largely and once that started there was obviously no coming back due to massive decrease in activity on the site that would scare away new users. Myself included: Previously I was spending at least 1 full hour a day on Canvas for about 5 months straight and just some days later it went down to like 5 minutes a day before leaving completely. To this day I fail to see how they ever wanted to monetize Canvas. I think that was the real issue here. It looks like the site had a few hundred uniques a day for the last couple of months and the servers are still running... http://www.alexa.com/siteinfo/canv.as http://www.alexa.com/siteinfo/canv.as

dclara 13y ago
I think what you said is very typical. Apps are like mini toys or online games. People lose their curiosity very soon since there are so many free choices out there. We cannot expect or take it too seriously for the long run. Being adopted to a certain extent as Canvas DrawQuest is good enough.

siliconc0w 13y ago

Mobile gaming is about risk management. There are a lot of failures but the successes can be huge and pay for everything else. You try and try again until you strike the rich vein of players who are actually willing to sink money into virtual crap. Even with incredibly coercive game design and analytics - finding and engaging these users is hard.

dclara 13y ago
Expectation must be adjusted. A lot of apps and even real world products should shoot for a short term profit and gain in before the majority of people lose the curiosity and become tired of it.

diestl 13y ago

Startup delusion is the new gold rush, the only ones making money are those selling the dream. As soon as I see someone using startup buzzwords like runway, pivot etc I see a sucker who is has stars in their eyes.

jgh 13y ago
Except Moot is the guy who made 4chan

udev 13y ago

I read many post-mortems, but this one, for some reason, struck me as being very frank and unforgiving in its assessment.

Phil_Latio 13y ago
Still kind of shady (or is it just me??..): When they launched DrawQuest, Canvas was already dead. However they did not acknowledge this in any way. Today Canvas is still online while not having any proper audience or any changes to the site for like 2 years. All in all they got like $3.6 million for Canvas in funding without any income. He writes it himself: > we created DrawQuest after the failure of our first product, Canvas Why keep it online for another 2 years if it failed? I don't get it.
- anthony_franco 13y ago
  Not sure about his case, but in my case I still keep my failed startup online (http://friendcameo.com/ http://friendcameo.com/) Mine failed in the sense that there's no way of growing or monetizing it in a way that's worth my time and effort. But at the same time, I can sometimes run experiments/surveys on it that allows me to learn and apply finding to other more successful ideas. I'm guessing Canvas is along the same lines.

ojbyrne 13y ago

Surprisingly gracious and heartfelt.

udev 13y ago
Exactly. I got the same impression.

avenger123 13y ago

"As we approached the end of our runway, it became clear to us that DrawQuest didn’t represent a venture-backed opportunity, and even with more time that was unlikely to change." I believe this is the heart of the message. It looks like there was no revenue generation model that could give back the money invested ($3.6 million) and provide a real return. The application is successful and there is a large user base. Let's assume DrawQuest is able to make a profit of $200,000 a year on revenue of $400,000 based on some simple changes to allow users to pay for premium features. For a very small company with 2-3 people, this may be enough to keep going. Now, I don't know what these numbers can really be but I would imagine for a bootstrapped company it would be viable. It's unfortunate that this business "failed" because the profit it can generate just isn't enough for the investors and the founders. It would be nice if instead of shutting it down, it's handed out to others that will be happy with its lower profit potential.

benjaminwootton 13y ago
Seems like you have to be really careful with VC as it can reframe a success into a huge failure.
- sliverstorm 13y ago
  But if you are making less than pennies on the dollar, was it ever a success anyway? Having users and traction is not success. Plenty of companies get both users and traction, all they have to do is tolerate negative profits...
  - ForHackernews 13y ago
    shrug It seems to work for Amazon. All you need is patient investors.
    - sliverstorm 13y ago
      Amazon is somewhat of a different story; Amazon is enduring small profits by choice in a bid for the future, and investors feel like they see that future, that tremendous potential. The way they are playing it, IMO Amazon is still neither a success nor a failure. Their story is still being written, as they position themselves for whatever move they have been preparing for the last decade.

dodadmin 13y ago

I help run a site called Doodle Or Die (http://doodleordie.com http://doodleordie.com), which is very similar to DrawQuest. Much like them; we barely cover our costs. But we've largely automated away most human effort so that we can keep the site going for our community while we figure out a brighter future for it. While our game is similar; I think the way we have approached it from the business standpoint is more realistic. We fully bootstrapped it ourselves and never put ourselves in a position where it had to make money. All of the people working on it still have day jobs. We see Doodle or Die as a great side project that we will continue to work on and maybe we will get it enough traction to attract a buyer. As much as we want it to be the next DrawSomething we knew that it would be a hard road towards that and therefore we were never holding our breath. There is something to be said for going out and taking the bigger risk like DrawQuest did. But I think we have all agreed to save our bigger risks for bigger opportunities (i.e. we are all working at successful startups outside of Doodle Or Die that have a much better future). We never took the risk; and that's why you don't see us writing a blog about our failure. With all that being said we welcome DrawQuest users to try out Doodle Or Die.

erichate 13y ago
That's a nice site, have come across it before and had a couple laughs. I too took an interest in this thread because of involvment with a product that shares some similarities (http://www.freeriderhd.com/ http://www.freeriderhd.com/). Unfortunately one thing is likely, it won't become the next draw something if it is being tackled as a side project and not full time. I commend you guys for bootstrapping it but if you aren't in a situation where you have to make money from it that removes a big motivator for success or even failure for that matter and you just end up waiting on or hoping for better days ahead which likely won't come without some hard dedicated work.
- dodadmin 13y ago
  Awesome work you have done there with Free Rider. I think I can play that for hours. It is true that dedication is necessary when doing a startup. But I guess my point is that we must prioritize our dedication. So far, the other startups we are currently working for have a much higher chance of success than the really fun drawing game we created. When evaluating a startup you must look at how big the thing can be if everything goes perfect. It is obvious moot saw that with 4chan. And I think there was a good opportunity there with Canvas. But with DrawQuest I think the opportunity was smaller and therefore a different model of dedication (which he seems to be moving towards) might be more appropriate. Every week I want to start programming on a new idea that pops into my head; and many times I do. But prioritizing which of those stay as thoughts in my head, side projects, or companies is something I am always evaluating. Given what Doodle Or Die is and what it can be; I think a bootstrapped side project approach was best. DrawQuest would be a great side project success story if it stayed that way. But then again, it probably would have not even been as successful as it was without the dedication he put forth in a full-time way. In short, I have concluded that I know nothing and that we are both right. I guess the choice of which way to go depends a lot on the person and the circumstances around them. I think I put on my Captain Hindsight (http://doodleordie.com/c/1qLInbnKCE http://doodleordie.com/c/1qLInbnKCE) goggles for a second there.

jsemrau 13y ago

Just a thought exercise. How many cars would Mercedes-Benz sell if they would give out the cars for free?

dclara 13y ago
Good point. But there are numerous apps available, are you going to choose anything not free? Actually I did once. I cannot find a good background for my Nook tablet, I spent $1.99 to buy one since Nook does not open to Google Appstore. But how can you make your app being listed on the top? So I think the apps builder are more for fun than making money out of it.

andrew_wc_brown 13y ago

http://memegenerator.net/instance/45092497 http://memegenerator.net/instance/45092497

Sindrome 13y ago

How do I created successful startup? - Business Spiderman

Keyframe 13y ago

Damn, I have a draft of an idea that is similar to this that I want to dedicate my time to later this year. I haven't even heard of DrawQuest, and it's not essentially like it, but is rather similar. However, I can see at least 10+ ways to monetize it. I wish there are/will be more details why this failed.

baldajan 13y ago

I actually run a startup (in someways similar to draw quest) and was constantly told it is a lifestyle business; but I've only recently realized it doesn't have to be. That model is difficult to find, and will seem all too obvious once it's discovered (look at Facebook or Twitter). I believe if moot had cracked it (that model) and had sustainable week over week growth, draw quest could have survived. I was once told by the CEO of Kik, it's a lot harder to get to 100 million users than it is to get to a 100 million dollars. I couldn't agree more.

dclara 13y ago

What a splendid marketing campaign for attracting new users to visit 4chan? While we are busy discussing about the failure or success, while we are feeling the ups and downs as if we are experiencing, 4chan is way bigger than the two apps. Why whining? It's a joke. But now I got caught by 4chan. I became one of the unique million visitors of it. From this perspective, I fail forever, because I don't have this level of marketing skills. But hopefully, I have better product to show. http://kck.st/JNqv8z http://kck.st/JNqv8z

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jmnicolas 13y ago

It never cease to amaze me how in the start-up world people can "loose" millions and nobody cares. It's like free money. IMHO the second start-up bubble is about to pop.

jackgavigan 13y ago

I have a thesis that the success of startups that operate in a market with strong network effects is often more about luck than skill and that, therefore, repeat success on the part of the founder(s) is by no means guaranteed. It's like when a first-time golf player scores a hole-in-one. If you try to get them to repeat the feat, they can't because they don't actually know what they did to get the ball in the hole - they just whacked the ball in the general direction of the tee. Now, take a thousand ball-whackers (startups) all targetting the same tee (market). If the network effects are strong enough, one of them is going to win simply by getting their ball closest to the pin. They don't have to actually get it in the hole - as long as it's the closest, the network effects will take over and push the ball into the hole. Result: The ball-whacker is perceived as a genius and VCs line up to invest in his next startup. However, if the first success was, indeed, down to luck, there's no guarantee that the second attempt will be equally (or, indeed, anywhere near as) successful. This isn't to say that all first-time hole-in-one ball-whackers are just lucky. Some are clearly naturals. The trick is distinguishing between the naturals and those who were simply lucky.

JackpotDen 13y ago
we're all a massive statistical experiment. in every stage of every thing.

pmcpinto 13y ago

Thumbs up for the honesty

Lionga 13y ago

With 25K DAU und 400K MAU you have 6% DAU/MAU which is the worst engagement rate i have ever seen (25% might be acceptable). Yet he says "Retention and engagement are great" Using 3.6 Million $ to build a simple drawing app probably worth about 3.600 $. "Our most recent product, DrawQuest, is by all accounts a success".

beauzero 13y ago

I would find it very helpful if you posted about how you went about the monetization decisions...both successes and failures. Thank you for sharing.

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