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In the early 2000s with a few friends together I founded and ran a web development startup in Germany. Because I had been consulting for advertising agencies si

by Udo 12y ago

In the early 2000s with a few friends together I founded and ran a web development startup in Germany. Because I had been consulting for advertising agencies since high school, building a service company for agencies seemed like the natural thing to do. Afterall, it was the kind of customers I understood well, and my cofounders were enthusiastic about the concept, too. Despite doing every single conceivable thing wrong, we lasted a few years before dramatic failure ultimately hit. I learned the insidious thing about initial (modest) success is you become conditioned to underestimate the scope and probability of failure that can topple you in the future. One of my cofounders, who had always hated the startup part of our endeavor, and who wanted us to become a respectable German company as soon as possible, he was the first one to bail. And in hindsight he was absolutely correct about choosing the right moment to quit. It took me a few more months of pouring my own money in and taking on debt until I realized how absolutely screwed we were. Let me tell you: failing, in Germany, with your own money and in debt... it's pretty bad. Here, culturally most of your relationships are built on a sense of success and respectability. You lose all that in an instant. Customers and business partners wouldn't even take my call when I wanted to do a last farewell chat, even though we didn't owe them any money or anything like that. The disappointment coming from my family and friends was just complete and total, though they tried to be nice about it. The failure of my company now meant that I as a person was also a failure. After going down with the ship I went for a full time job, eventually sold a side project/company for a bit of independence, and did this for a few years, then transitioned to freelance software development. I have to say after the startup - even considering the horrible parts towards the end - after the startup there is a bleakness to a "normal" lifestyle I could never quite shake off. Recently I've also gotten some very unpleasant nudges from life which made me realize time spent on things is irrevocably wasted if they're not important to me. So I'm going into the fray again. In fact I'm working on a prototype right now.

k__ 12y ago
Can't blame you. I know a bunch of german companies who did everything wrong, but still operate for years. Many of my friends worked for so called "web agencies" who build shitty typo3 pages en masse. Most of the people working there were interns. I worked at a academic spin off. They had good tech but bad UX. They worked on for about 14 years and didn't make any money. Somehow the founders were good at raising money from investors. So the bills always got paid.
- Udo 12y ago
  > "web agencies" who build shitty typo3 pages en masse This is what our initial success was built on. We had a two-pronged approach. First, in the homeland of typo3, we got massive mileage out of our own CMS product which could do everything that was oh so painful with the usual products in this space. We became the "can do" guys, and we could do everything so much faster and more elegantly than the competition. Our second angle was our stealthiness: since agencies are in the business of appearing way larger and more talented than they actually are, bringing in outside contractors was a serious loss of face for them. We offered to appear as internal agency staff in all customer interactions. We would go to on-site meetings in their clothing style, even. Technical customer support calls were transparently routed to our office, to complete the illusion that everything was done in-house at the agency. Everything else we did wrong, though. We had too many employees, some of them were bad hires to begin with, and we worked them too hard, too. You can't keep a whole team in death march mode all the time. We founders were terrible bosses, as well. I was way too friendly to the point of being taken advantage of, another founder was just generally clueless about everything, and the third one was so harsh and troubled when he patrolled through the offices it actually looked and felt like he was captain Ahab tormenting his trembling crew. Then the budgets of the agencies crumbled suddenly, and almost over night there was just no more money. The little work we got came at unworkable margins. Agencies were poaching our employees. We took on big, risky projects just to stay afloat. One of our biggest customers went bankrupt and then sued us for everything they had paid for our services in the last 12 months. And they won (still a bit unclear how that was even possible, but I found out later their CEO was personal friends with the judge). All in all, it was one hell of a learning experience. But there were some good times as well. And the freedom to work on something you care about is just priceless.
  - k__ 12y ago
    > Everything else we did wrong lol, implying completing "the illusion that everything was done in-house at the agency" wasn't wrong in the first place. Anyway, I still can't imagine why people found agencies. If I want to do consulting, I'd become a freelancer, this pays much better and there is plenty of work. If I don't, I would work at a real software company that builds and sells software products...
Swizec 12y ago
> after the startup there is a bleakness to a "normal" lifestyle I could never quite shake off "Running a company would make you perfect for any conceivable job were it not for the fact you'll never want one again." Not sure where I read that, but it sounds true. I am being gently pushed into job life by circumstance after 5 or 6 years of independent life (startup ~2 years, school ~1 year, freelancing ~2 years) and getting hired, even just talking about the possibility of a job job, feels like losing. But alas, freelancers do not get visas so I will just have to suck it up.
- patio11 12y ago
  Might be a variation on https://twitter.com/patio11/status/470805921656893440 https://twitter.com/patio11/status/470805921656893440 although it certainly isn't uniquely my insight.

by Udo 12y ago

k__ 12y ago

Can't blame you. I know a bunch of german companies who did everything wrong, but still operate for years. Many of my friends worked for so called "web agencies" who build shitty typo3 pages en masse. Most of the people working there were interns. I worked at a academic spin off. They had good tech but bad UX. They worked on for about 14 years and didn't make any money. Somehow the founders were good at raising money from investors. So the bills always got paid.

Udo 12y ago
> "web agencies" who build shitty typo3 pages en masse This is what our initial success was built on. We had a two-pronged approach. First, in the homeland of typo3, we got massive mileage out of our own CMS product which could do everything that was oh so painful with the usual products in this space. We became the "can do" guys, and we could do everything so much faster and more elegantly than the competition. Our second angle was our stealthiness: since agencies are in the business of appearing way larger and more talented than they actually are, bringing in outside contractors was a serious loss of face for them. We offered to appear as internal agency staff in all customer interactions. We would go to on-site meetings in their clothing style, even. Technical customer support calls were transparently routed to our office, to complete the illusion that everything was done in-house at the agency. Everything else we did wrong, though. We had too many employees, some of them were bad hires to begin with, and we worked them too hard, too. You can't keep a whole team in death march mode all the time. We founders were terrible bosses, as well. I was way too friendly to the point of being taken advantage of, another founder was just generally clueless about everything, and the third one was so harsh and troubled when he patrolled through the offices it actually looked and felt like he was captain Ahab tormenting his trembling crew. Then the budgets of the agencies crumbled suddenly, and almost over night there was just no more money. The little work we got came at unworkable margins. Agencies were poaching our employees. We took on big, risky projects just to stay afloat. One of our biggest customers went bankrupt and then sued us for everything they had paid for our services in the last 12 months. And they won (still a bit unclear how that was even possible, but I found out later their CEO was personal friends with the judge). All in all, it was one hell of a learning experience. But there were some good times as well. And the freedom to work on something you care about is just priceless.
- k__ 12y ago
  > Everything else we did wrong lol, implying completing "the illusion that everything was done in-house at the agency" wasn't wrong in the first place. Anyway, I still can't imagine why people found agencies. If I want to do consulting, I'd become a freelancer, this pays much better and there is plenty of work. If I don't, I would work at a real software company that builds and sells software products...

Swizec 12y ago

> after the startup there is a bleakness to a "normal" lifestyle I could never quite shake off "Running a company would make you perfect for any conceivable job were it not for the fact you'll never want one again." Not sure where I read that, but it sounds true. I am being gently pushed into job life by circumstance after 5 or 6 years of independent life (startup ~2 years, school ~1 year, freelancing ~2 years) and getting hired, even just talking about the possibility of a job job, feels like losing. But alas, freelancers do not get visas so I will just have to suck it up.

patio11 12y ago
Might be a variation on https://twitter.com/patio11/status/470805921656893440 https://twitter.com/patio11/status/470805921656893440 although it certainly isn't uniquely my insight.