I wanted to make money instead of making someone’s life better
FollowingDry9912 on
Partner ran off with the money.
Ok-Flatworm6098 on
I write a newsletter where I interview “failed” founders about how and why their business failed. They have some really great insights!
1. Validation! Most startup founders fail because they’re building to perfection. They don’t validate their idea and what I’ve found is for 1 primary reasons. they’re too scared to speak to customers for fear of rejection so they just build what they think is the perfect product
2. Marketing – build an MVP, and market it to get users to get feedback and to iterate. Again, founders, many who are solo founders, are technical. They don’t know how to market their product, so they build to perfection not knowing what users actually need. Market it a product to get users!
3. The wrong cofounder – self explanatory but a key one here, some business partners are too alike. You need to be aligned for the end goal, but sometimes founders “hype” each other up. What you need at times is a founder that plays devil advocate, to remove bias from any ‘ideas’ that may seem good but in hindsight are really bad
4. Capital. Recently interviewed a founder who started a company with $250k debt, collateral against a piece of land. Scaled the company to $$4.5m by year 2, loses 85% of clients year 3, closed year 4. This was 2016. He’s still paying the debt off given high interest rates. His advice, debt can work for some, but he’d rather fail again using his own money.
5. Know who’s paying. This is such a simple idea but found it so insightful from a founder. He interviewed a bunch of dads before building, they loved the idea of a real time AI filter for children’s devices. He built it. Found no paying users once built. Why? He found that mums were the decision makers in household for purchases related to their children. A compete oversight in his part, but was very very interesting.
6. Know your legals, got a great story of a founder who created a fiver/Upwork before they were a thing back in the mid 2000s, found out he didn’t own the company as cofounders screwed him over, read your legals!
Bunch more insights…happy to share them
Critical-Snow-7000 on
The people in China I bought my product from began listing the same product on Amazon for my wholesale cost. Business had been slowing and I was looking for an out but it was still sad.
rakeshkanna91 on
Wrong hire. Didn’t raise funds when we should’ve.
Catty-Driver on
In my case the technology we built 20+ years ago is still unparalleled. In my opinion, we didn’t go to market early enough. We spent time making it perfect without feedback from customers.
On one hand none of us had experience in the IT space. That allowed us to solve a problem that several big IT companies had tried and failed.
On the other hand we didn’t have any experience in the IT space. We expected customers to completely change the way they did business for us! 😛 Had we engaged customers earlier we would have learned what we were missing.
For myself I spent too much time on the technology and almost no time on sales. As a small company sales are more important than anything. Once we were good enough, I should have transitioned to sales. I did get involved in sales support, but not in sales.
I always believed that sales people were magical unicorns. In a later business, I did sales and was very good at it. Turns out people need stuff and you supply what they need. Mostly simple. 😛
Complex-Anteater2917 on
My biggest mistake was trying to work as many hours as possible, often pushing myself to 14-15 hours a day. I thought it was the only way to get things done, but in doing so, I lost clarity and the ability to make strategic decisions. I was so focused on doing more that I missed the truly important choices. In the end, I found myself in a difficult situation that I could have avoided if I had kept a clearer, big-picture perspective.
AloneTraffic3041 on
My cofounder was the CEO. I was too busy building the product to realise he’s all talks and no work.
Wasted money on a bunch of minions (interns). Lied about raising funds.
On a good note, he didn’t understand even the ‘t’ of tech. So, I sold the software as an individual and made some money.
Outwardly, the startup failed miserably.
biglatgainz on
Thanks everyone for sharing your stories it’s really helpful to those of us who are on the brink of taking that jump.
Background_Use2516 on
I’ve helped start a half dozen companies only two of them more successful and on those ones I had partners who knew business, programming, and to some extent marketing, and could afford to go for a year with no income from the project. My role was art and visual design.The successful companies were video game developers, and are still in business in some form after numerous buyouts and mergers and so forth. One of them sold for $150 million back when that was real money In the 2000s. I’ve also tried to start other video game developers, and some VFX companies. With groups of creative people, but the problem was it was all Indians and no chiefs. Just because you have artist and programmers and can make cool stuff isn’t helpful if there’s no market for it and nobody to promote it. Trying to have a super creative company with no bosses wound up just having no direction. Clash of egos with no way to resolve it. That business eventually did find a profitable niche after most of us quit and only one egotistical guy was left to became the boss lol
As an aside, Every single one of these startup expenses was financed by other peoples money, which is a double edge sword because on the one hand, I didn’t lose money on the failed businesses, but I also didn’t make out very big on the successful ones. I don’t know anything about how to get other peoples money that’s why I had to have business partners.
Me and my bro built a web app in 2015 called WaitMate, which was intended to use crowdsourcing to inform folks what current wait times are at restaurants, barber shops, banks, urgent care clinics, laundromat laundry availability, pharmacies, etc. Of course that was way too broad, so we focused first on restaurants.
Naturally, owners were like “why would I want to advertise what my wait times are??” and begged us not to do it, found every reason it wouldn’t work, etc. UNTIL I offered a solution, which was to advertise on our platform, putting their restaurant at the top or more visible.
We got a few restaurants to let us test out with them, and a few advisors who were angel investors and restaurateurs themselves. No investment capital though until we could get users… which was the most important part. Well, the back-end was the thing that needed the most attention in order to make it work. I even got Nick Reader, co-founder of Outback Steakhouse, PDQ Chicken and CFO of the Tampa Bay Buccaneers, to use WaitMate if we could get 10,000 users. We had like 5.
Long story short, I couldn’t get my bro to meet the timelines necessary and I didn’t have a network of programmers to get the ball into the end zone. So it fell by the wayside and I went back to my 9-5.
Unfair_Pop_8373 on
Two failures 1. Distribution issues and a failure to capitalise on market opportunities. 2. A failure to understand the required “infrastructure” for a consultancy business model.
Comfortable_Sir6063 on
(1) did online marketplace for offline advertisement (think hoardings). Barrier to entry was low, as soon as I saw traction one of the larger corporations doing outdoor advertisement stated their own website for booking it’s hoardings.
(2) did meat and seafood delivery – this is in 2013-14. Did not have as many smart phone users as we do now and 4g wasn’t a thing. Food delivery was still new then so The market was not very ready for raw food delivery. Had to shut down and in 2017-18 some startups got well funded to work in the same space.
(3) budget/cheap ad videos – honestly did great for a few years, grew to a full time team of 8 people, plus some interns and freelancers (on project basis). Covid hit and the market dynamica changed so radically we couldn’t compete. Covid also led to a major shift to influencer marketing getting more budgets than making your own ad films.
14 Comments
I wanted to make money instead of making someone’s life better
Partner ran off with the money.
I write a newsletter where I interview “failed” founders about how and why their business failed. They have some really great insights!
1. Validation! Most startup founders fail because they’re building to perfection. They don’t validate their idea and what I’ve found is for 1 primary reasons. they’re too scared to speak to customers for fear of rejection so they just build what they think is the perfect product
2. Marketing – build an MVP, and market it to get users to get feedback and to iterate. Again, founders, many who are solo founders, are technical. They don’t know how to market their product, so they build to perfection not knowing what users actually need. Market it a product to get users!
3. The wrong cofounder – self explanatory but a key one here, some business partners are too alike. You need to be aligned for the end goal, but sometimes founders “hype” each other up. What you need at times is a founder that plays devil advocate, to remove bias from any ‘ideas’ that may seem good but in hindsight are really bad
4. Capital. Recently interviewed a founder who started a company with $250k debt, collateral against a piece of land. Scaled the company to $$4.5m by year 2, loses 85% of clients year 3, closed year 4. This was 2016. He’s still paying the debt off given high interest rates. His advice, debt can work for some, but he’d rather fail again using his own money.
5. Know who’s paying. This is such a simple idea but found it so insightful from a founder. He interviewed a bunch of dads before building, they loved the idea of a real time AI filter for children’s devices. He built it. Found no paying users once built. Why? He found that mums were the decision makers in household for purchases related to their children. A compete oversight in his part, but was very very interesting.
6. Know your legals, got a great story of a founder who created a fiver/Upwork before they were a thing back in the mid 2000s, found out he didn’t own the company as cofounders screwed him over, read your legals!
Bunch more insights…happy to share them
The people in China I bought my product from began listing the same product on Amazon for my wholesale cost. Business had been slowing and I was looking for an out but it was still sad.
Wrong hire. Didn’t raise funds when we should’ve.
In my case the technology we built 20+ years ago is still unparalleled. In my opinion, we didn’t go to market early enough. We spent time making it perfect without feedback from customers.
On one hand none of us had experience in the IT space. That allowed us to solve a problem that several big IT companies had tried and failed.
On the other hand we didn’t have any experience in the IT space. We expected customers to completely change the way they did business for us! 😛 Had we engaged customers earlier we would have learned what we were missing.
For myself I spent too much time on the technology and almost no time on sales. As a small company sales are more important than anything. Once we were good enough, I should have transitioned to sales. I did get involved in sales support, but not in sales.
I always believed that sales people were magical unicorns. In a later business, I did sales and was very good at it. Turns out people need stuff and you supply what they need. Mostly simple. 😛
My biggest mistake was trying to work as many hours as possible, often pushing myself to 14-15 hours a day. I thought it was the only way to get things done, but in doing so, I lost clarity and the ability to make strategic decisions. I was so focused on doing more that I missed the truly important choices. In the end, I found myself in a difficult situation that I could have avoided if I had kept a clearer, big-picture perspective.
My cofounder was the CEO. I was too busy building the product to realise he’s all talks and no work.
Wasted money on a bunch of minions (interns). Lied about raising funds.
On a good note, he didn’t understand even the ‘t’ of tech. So, I sold the software as an individual and made some money.
Outwardly, the startup failed miserably.
Thanks everyone for sharing your stories it’s really helpful to those of us who are on the brink of taking that jump.
I’ve helped start a half dozen companies only two of them more successful and on those ones I had partners who knew business, programming, and to some extent marketing, and could afford to go for a year with no income from the project. My role was art and visual design.The successful companies were video game developers, and are still in business in some form after numerous buyouts and mergers and so forth. One of them sold for $150 million back when that was real money In the 2000s. I’ve also tried to start other video game developers, and some VFX companies. With groups of creative people, but the problem was it was all Indians and no chiefs. Just because you have artist and programmers and can make cool stuff isn’t helpful if there’s no market for it and nobody to promote it. Trying to have a super creative company with no bosses wound up just having no direction. Clash of egos with no way to resolve it. That business eventually did find a profitable niche after most of us quit and only one egotistical guy was left to became the boss lol
As an aside, Every single one of these startup expenses was financed by other peoples money, which is a double edge sword because on the one hand, I didn’t lose money on the failed businesses, but I also didn’t make out very big on the successful ones. I don’t know anything about how to get other peoples money that’s why I had to have business partners.
Not failed completely but I had to change my focus. Here is the full story: https://x.com/onurgenes/status/1837424440386138566?s=46&t=kb9udmlsW80ZzYzpF-OjrQ
Me and my bro built a web app in 2015 called WaitMate, which was intended to use crowdsourcing to inform folks what current wait times are at restaurants, barber shops, banks, urgent care clinics, laundromat laundry availability, pharmacies, etc. Of course that was way too broad, so we focused first on restaurants.
Naturally, owners were like “why would I want to advertise what my wait times are??” and begged us not to do it, found every reason it wouldn’t work, etc. UNTIL I offered a solution, which was to advertise on our platform, putting their restaurant at the top or more visible.
We got a few restaurants to let us test out with them, and a few advisors who were angel investors and restaurateurs themselves. No investment capital though until we could get users… which was the most important part. Well, the back-end was the thing that needed the most attention in order to make it work. I even got Nick Reader, co-founder of Outback Steakhouse, PDQ Chicken and CFO of the Tampa Bay Buccaneers, to use WaitMate if we could get 10,000 users. We had like 5.
Long story short, I couldn’t get my bro to meet the timelines necessary and I didn’t have a network of programmers to get the ball into the end zone. So it fell by the wayside and I went back to my 9-5.
Two failures 1. Distribution issues and a failure to capitalise on market opportunities. 2. A failure to understand the required “infrastructure” for a consultancy business model.
(1) did online marketplace for offline advertisement (think hoardings). Barrier to entry was low, as soon as I saw traction one of the larger corporations doing outdoor advertisement stated their own website for booking it’s hoardings.
(2) did meat and seafood delivery – this is in 2013-14. Did not have as many smart phone users as we do now and 4g wasn’t a thing. Food delivery was still new then so The market was not very ready for raw food delivery. Had to shut down and in 2017-18 some startups got well funded to work in the same space.
(3) budget/cheap ad videos – honestly did great for a few years, grew to a full time team of 8 people, plus some interns and freelancers (on project basis). Covid hit and the market dynamica changed so radically we couldn’t compete. Covid also led to a major shift to influencer marketing getting more budgets than making your own ad films.