In retrospect - what do you think was the most significant factor that made it fail? Bad market research? Wrong product design? Engineering failure at executing properly?
Side note - what’s so funny about the current buzz around ChatGPT is that everyone is forgetting that tons of companies were funded to create chat AI interfaces backed in 2014-2016 and all of them went nowhere! A lot of it was kicked off by Zuck announcing that FB Messenger would be the future of e-commerce which threw fuel on the fire. But I digress. https://techcrunch.com/2016/04/12/agents-on-messenger/amp/
The company raised huge money, like $100 million in a few quick rounds, despite no revenue and few users. The product launched, no one liked it, then everyone just fucked around all day for like 5 years until it was acquired for no money. I left after 12 months because it was a joke despite “big names in AI” working there and a semi-famous co-founder.
What became very obvious was that an imperfect chat robot was a terrible way to book something as essential as flights and hotels. Eventually it became a self-automated flow where the chat bot was basically a flow chart, and then eventually that was abandoned and it became a clone of all the travel booking websites and apps.
I would be very, very leery of AI right now - I lived this story before and you’d be amazed at how efficient a few button clicks are vs. trying to explain exactly what you want to a robot. Finding paying customers is an open question even for the biggest names. AI seems more like a feature than a product to me, but time will tell I suppose.
The pain is definitely there: people in the companies are chasing 5 years old documents, engineers are wondering what's a bug and what's a feature and who the hell approved what.
While I don't think it's unicorn material, I think I can convince some PMs to get approval for a 50-100$ monthly spend on the company credit card.
Building the app is actually quite straightforward. Getting people to use it is the hard part.
Essentially stayed in my comfort zone of engineering and product, rather than going out of my comfort zone of sales.
I will add to this, that when I conceived and built the product myself (with dev help of course) I took product shortcomings more personally. It's always a delicate balance between finding customers that will buy the existing product vs. taking the roadmap suggestions from potential customers. If you are managing the product and the sales there is also emotion/pride involved.
Probably a good reason to have different people focused on sales and product.
Current one is going better since i learned sales.
Edit: I was very young, inexperienced, and was literally learning on the go. Totally set to fail.
If it didn't collapse due to financial mismanagement, we would fail due to our own incompetence :)
Fast forward a while and we get to the cold calling stage. And I'm getting frustrated because I'm wearing 25 hats and running surveys and whatever, and we don't have good leads , we HAVE to start cold calling and I whip up a list of a 100 or so numbers and call a meeting and say , "look we have to go through these" , absolutely noone wanted do to it, not even the guy who's idea this was. I walked away shortly after that and it never went anywhere.
none of them failed because we didn't scale the tech, or use the wrong language or a bad DB schema or whatever. It was always market fit, constant pivoting, lack of product focus, etc.
And I'm not saying "it's never the engineers' fault". Engineers should worry about stuff like that, but we spend way too long focusing on stupid things like the language or the DB engine we use.
In another case: local government imposing a regulation scheme on crypto-related projects that we couldn't meet. Not because we did scetchy stuff, but because the regulation scheme required rediculous budgets, corporate setup (specialized risk and compliance departments and officers and all etc) all on a startup that was running under €3000/month.
Now, 12 years later... I saw what I built done by others on every restaurant. We were simply way too early.
order food apps? shift planning app?
But I finally gave up because too many clients had a bottomless appetite for services and seemingly limitless capacity to ignore contractual payment terms.
"If you need to make a single cold call in the first 2-3 years, consider your network might be insufficient."
Such cold calls would include finding: co-founders, investors, customers, service providers, manufacturers, employees, etc.
Mind you-- I got this wrong in my own startup that didn't survive. Having advised founders and non-tech entrepreneurs in Seattle, SF and Vancouver and of those who heeded the advice, they succeeded where I didn't. E.g., when I had a co-founder flake on me, my network was insufficient to have another person I could trust to step in as subject matter advisor. Not that I would have expected that advisor to write code but perhaps to guide me through the principles of the niche topic such that I could then find the right contractor or employee.
Likewise, for some businesses including certain SaaS: picking your first customers carefully often requires a chain of trust in both directions; i.e., your network.
The idea was that this 3rd party legacy company would own the business logic and we would make it cloud/web/iOS/Android capable and give it a usability makeover to make it so you don't need a PhD to use. We had it running on windows cloud servers for a long time and spent A LOT of time getting the code portable on linux
Most of the tech guys thought we should try to cut off 3rd party and just roll our own solution for business logic (might have actually been cheaper, but longer time horizon). But lead executive refused, then lead backend dev left which trigger an avalanche of people leaving, first lead devops and lead frontend, then me. Product got cancelled
Fun info, just yesterday I came across the term "cockroach startup" something like "unicorn startup". Cockroach startups are those that survive and thrive financially no matter what the economic conditions are. And they do that by being conservative with their expenses and manage their cashflow very well.
That's equivalent to "most people die because they stop breathing".
Longer story: I ran a startup that did natural language data analysis (kinda like what people are trying to do now with ChatGPT). You could ask it a question (via email or command line) and it would return its analysis. It could do a variety of statistical analysis and could explain the results in words (tho not as well as a finetuned ChatGPT could do today).
Technically it was strong. And I'd say way ahead of the curve. A few things caused the failure:
1. Spending too much time keeping one potential cash cow instead of finding more clients. Having failed a few prior startups, we (cofounders) were obsessed with getting and more importantly keeping clients. This led us to build integrations for clients. One integration was particularly absurd: the "database" that they wanted to connect to is a PowerPoint file on a SharePoint server. Specifically the tables on particular slides. We spent way too much time building custom integrations
2. Running costs were too high. We had developed a sorta "staggered on-line" training scheme. Each client had its own model. Monthly costs per client reached $2000 per month. But with one of the clients we absorbed the costs because they were a potential cashcow (same client as above)
3. The main stakeholder at this potential cashcow left the company to found his own startup, leaving no one else to advocate for my product. At the same time the two other clients decided it was way too expensive to having not enough of an impact on the business.
Thus, we ran out of money. Good news is that Gorgonia (https://github.com/Gorgonia) was born from this. I'm still working on the framework for deep learning today
These failure experiences led me to build EarlyBird (https://earlybird.im) - a no-code SaaS for startups to turn ideas into customers, I want to help people avoid making the same mistakes when starting up.
I feel my current one is going the same direction too unfortunately, development is the only department delivering, no contracts coming through at all
I shared the story here a while ago [1]. It was also discussed here on HN [2]. There's way more to it, but this was the biggest mistake we've made.
[1] https://www.dsebastien.net/2021-01-04-20-months-in-2k-hours-... [2] https://news.ycombinator.com/item?id=25627081
Thinking that if we built the best technical product, the customers would naturally come to us.
Our investors contacts turned out to be pretty bad and just wasted our time with unrelated mini projects (some of which they didn't pay) and we never managed to sell them the actual product.
In hindsight we had to figure out a different sales pipeline eg. try to offer a revenue shares to other actors in the market who had access to our target market.
We built a nice product for the time and one of the biggest companies in the world bought one of our competitor which was very very similar. The timing was ok, the product was there, we lacked in sales.
Arguably the last startup I was in hasn’t failed but… it’s not really growing from my purview either, they failed to entice the IC employees to stay with stock or sensible bonus payouts. Almost everyone not a “vp” left.
Were I to go for another startup I’d start it myself, start small with minimal time investment and throw the line in the water for paying customers. Basically I’d do it solo I think. With a product I know I’d personally want to pay for and use.
We were profitable on each individual asset we had to the tune of about 6.5% return after five years. Not profitable as a company though. Costs were fixed though (about 80 people in an office) so if we could have gotten more capital to buy more assets we would have become profitable. No one wanted to wait five years to get l 6.5% back in the midst of a bull market. So we failed to raise and died.
It talks about mistakes first-time startup founders made, and also how to avoid them, it's a very interesting reading!
There was always one more critical feature that we absolutely had to add before we could do it. Eventually we ran out of runway.
I bailed at the point more angel money was needed.
Not my views... Like I said, I bailed, then it fizzled out.
Also, I have learned that I hate thinking about money, and would rather just give things away for free; if I would have to create a business around an idea to make it happen, that's a good sign that I should find a better way to spend my time.