An interesting article, but the title left me with a question that the article completely failed to answer: what about the lesson "don't spend your family's life savings on your startup"?
Whether or not "don't spend your families life savings on your startup" is good advice or not really depends on the amount of the savings, the age of the individual/family, and the family's earning potential, etc.
Losing all of your $20k savings at age 25, DINK family: hurts, but not life-changing in any way (as long as your spouse is OK with it, and you'd better be damn sure they aren't lying to you when if they say it's OK)
Losing all of you $200k savings at age 35, two small children and stay-at-home spouse: extraordinarily painful and will impact every decision you make for a long time.
In both cases, it's possible that it will advance your career to the next level, which can make up for the loss in the long run. Work hard, save money, take calculated risks, don't be doctrinaire.
If your spouse says it's ok, go for it whether or not they are lying to you about it being ok.
If they are telling the truth, win.
If they are lying, it's best to find out now. Better your spouse gets 50% of a failed startup now and alimony based on your nonexistent income than 50% of your cash later.
I guess that goes to the old saw about don't bet more than you can afford to lose. The losing the life savings generally happens in chunks and you keep hoping things will get better - and then they don't - and suddenly you have the new problem of finding work, which takes more time and burns through more cash. So if you follow some of the lessons in the blog, you won't burn through your life savings. More on that later.
There is, of course, a corollary to this in that you can often afford to lose more than you think. Most people don't realize this, and hence, never take any risks.
When you're out of college, you're used to living on a shoestring budget. You can get by without quite little because you haven't really raised your standards of living around a big salary.
When you've worked for a few years, you've likely saved up a decent amount of cash (unless you live a life filled with consumption). You may have to cut back on all the perks but you can still get by.
Most of the people I know who want to start a company don't want to risk their current cash flow. Yet all of them have been working long enough where they've likely saved up enough money to go a long time without making money and be ok. I think the only thing is that people raise their standards of living (more expensive rent, big car payments, high rent/mortgage) such that they feel they must continue to make their current salary in order to "survive."
The problem is when you're the sole bread winner with 3 kids...When I was much younger I chucked it all and spent a year biking through South America. People asked me how I could leave everything behind - and my response was, "what behind?" I had no girlfriend, no fancy stereo (pre-ipod days)a VW bug, whose steering wheel would loosen up after every few hundred miles, so it was easy to leave it all behind because I didn't have much to start with. So my advice is don't wait - take risks when you're young and the consequences aren't that great and your cash flow needs are fairly limited. Don't wait because it doesn't get any easier.
The author had an invaluable experience, but I think the blog post doesn't do it justice. None of the section headings is actually that surprising; it's unlikely he started a business without being aware of all those lessons in the broad strokes. Be ruthless, yes, but why was he unable to be ruthless even when he knew he should be? "Fail fast"? What did he do that violated that? What was he thinking, failing slowly?
I wish he could come up with a way to give us more concrete details that add nuance to the broad lessons. Memories will fade, and if all he's saved of them is this blog post, the lessons will follow the life savings. And that would be tragic.
I appreciate the encouragement and challenge to write some more. I'll see what I can do to live up to your request but no guarantees as I'm trying to put some of the lessons to use=).
I consider this an important strategy when executing most tasks. It is an on field guideline in the Marine Corps to aim for a 70% solution to problems in some cases. It is sometimes a better strategy to implement an imperfect plan than to roll out the perfect plan by the time it's too late.
I just read Rework. There is a chapter called "learning from mistakes is overrated." It cites a Harvard business study that showed that startup founders who launched a startup and failed had about the same odds of success in their second startup as someone who was launching their first.
While I've learned valuable lessons from my (many) failures it's a nice reminder that there is also a lot to be learned from our successes.
"The issues that bother you at the beginning will be what kills you later."
This section describes a people problem, and I think the headline should be narrowed to that realm. Otherwise, a good, honest list that I believe will ring true to many HN readers.
The "looks like/is a goose" one reminds me of looking for a "market alternative" (from the book "Crossing the Chasm"). The market alternative is how potential customers presently deal with the problem the new product solves, and it has a name and an existing budget. This helps to communicate what the product is to the customer.
If it's hard to find such a market alternative, it's a sign that the product isn't ready to 'cross the chasm' into the mainstream - that is, it
won't be attractive to pragmatists (who just want a percentage improvement on existing methods, with minimal change). It's still in the non-mainstream pre-chasm realm populated by techies and visionaries (who think the tech is cool in itself, or who can see a new way to use it to make money, respectively).
It might also be that the target market selected isn't suitable, i.e. there might be another application of the technology and for another group of customers, for which there is an existing "market alternative".
So many of these things resonate for me, I'm troubled by a good third of the problems, or the seeds of the problems outlined here. Some sterling advice that I'm going to heed well.
I think the nature of the failed startup is irrelevant as much of the advice is raw, yet vague enough to apply to many areas. Almost all startups are based on a good idea, their success or failure rests almost entirely on the back of the choices you make along the way. Thanks for sharing this.
I like the goose metaphor and I see it in education all the time. We constantly tell undergraduates that learning math is not just about crunching numbers but about learning how to abstract and reason more efficiently and yet the tests and homework assignments tell a different story so the undergrads just learn how to crunch numbers.
If you're only willing to spend $1000 on a startup, and you count your own time (which you should), then you're going to have a rough time as an entrepreneur. Startups require risk and sacrifice. Maybe not bankrupt-your-family sacrifice, but sacrifice nonetheless.
No offence, but your comment is incredibly silly. There are plenty of successful businesses that started on kitchen tables with miniscule budgets and grew organically as the founders learned as they went along.
The cliche of the macho startup entreprenuer working 100 hours weeks and burning through cash for five years is not how many people become successful. Plenty of people start quietly in their spare time and build as they go along.
Startups require risk and sacrifice - yes, this is true. But not all businesses demand your internal organs and your wallet.
I hate the macho startup cliche as much as you. 100 hour weeks don't help a startup - they hurt - and it's never a good idea to dig a hole deeper than you can get out of.
But if you count your own time, which is worth AT LEAST $20/hour (if not $100), then you aren't going to get very far if you're only willing to commit $1000. Even if you don't count your own time, many opportunities require significantly more than $1K.
Success in a startup comes from tenacity more than anything else. If you aren't willing to make a real commitment (as the GP was suggesting), you're setting yourself up to fail.
Ah, yes I agree with you. Success comes from tenacity. But the original comment made me think all start ups should be sprinters. Some of us are marathon runners, or even long distance walkers! We get there, slower. But the persistence is just the same, even more, perhaps, due to the longer time frame.
"Fail quickly" always annoyed me. The part that annoys me the most is that institutionalized tend to view "I failed to the tune of several million dollars" as validation of somebody's investment worthiness. Sure there are lessons to be learned in failure. More often than not, the lesson seems to be "I learned how to convince VCs to give me money for a bad idea and an incompetent team!"
Fail quickly doesn't mean let your company fail. The goal is to figure out what doesn't work.Too many people try to develop a perfect product, etc... instead of investing the minimum amount required to get feedback and test the concepts with customers, stakeholders etc... It's better to discover that your great idea won't work with a paper sketch than to discover the issues after you've invested 6 months in development.
So fail quickly is about taking risks, making mistakes and learning as rapidly and as cheaply as possible - so ultimately you can be successful in the long run.
Getting people to change their habits is hard. After all shouldn't you be going to gym instead of watching mindless videos on Youtube? But are you? Read my post for some key product lessons http://kevinjmireles.wordpress.com/2006/08/03/product-adopti...
