daily articles for founders

The truth about a failing startup  

There's a pastebin text that went to the top of HN recently that is worthy of comment. I'll reproduce it below in case it gets removed from pastebin (not exactly the most reliable storage location):

Somehow, I managed to create an app that some people seemed to like. With some odd stroke of luck, an investor in the U.S saw the app, and saw something in me. He gave me a shot. Invested in me and my company.

Fast forward a couple of years, and that company still exists, but it’s on it’s last legs. It’s dying. I’ve failed. I haven’t been able to innovate, I guess I lost my touch. The money will run out within a couple of months, and the debts won’t be able to be paid. It will all collapse.

I think the investors lost faith a few months ago. They don’t contact me. They don’t even follow me on Twitter anymore and if they do contact and I reply, they don’t respond with answers to my questions.

It’s pretty shitty to be living in a state of impending doom. You know in a month or two, your entire life will crumble apart. You’ve tried everything but nothing works. Doom is coming. And you have to live with it. It’s a constant state of ever worsening depression.

When family asks how things are going, like all entrepreneurs, I respond with “Great!”. I don’t know how to tell them that I have failed.

The investors money is just about gone. My own money is non-existent.

I see articles on Hacker News about depression and entrepreneurs. Most of them are so far from reality. They don’t capture the sense of impending doom, the sense of failure. The don’t capture the loneliness, where you have nobody you can turn to.

If I can leave with one piece of advice to young founders. Please think really hard about taking other peoples money. If I had failed using my own money, I could live with it. But having a team of investors believe in you, only to let them down is an incredibly difficult thing to deal with. Try and finance your product yourself for as long as you can. At least until you can realise if your idea is decent (which takes a long time to figure out).

I commented on the HN post. I feel it's worth repeating that comment here and adding to it.

The idea that the (unhappy) end of a startup is depressing and filled with doom is pernicious, because it's partially true. Yes, it is a pretty difficult time, or at least it is until you finally admit to yourself that this venture has failed, and start the process on moving on.

Once you've done that, something surprising (at least the first time) happens:

You will feel an immense sense of freedom and lightness.

It's pretty obvious why: a weight is being lifted from your shoulder. Where your path was a narrow funnel leading to one specific destination, you will now have the infinity of all possible and reachable paths ahead of you. Before, you couldn't think of anything other than worrying about the startup - now you can do anything you want.

The end of a start feels very dramatic before it happens, but once it's done, you will feel a whole lot better. This is truly liberating.

One side-effect of this is that experienced founders tend to be much more willing to draw a line and call it a day. "Ok, this one isn't working. Let's figure out the next one."

Moving on cleanly and swiftly when it's time to move on (rather than 6 or 12 or 18 months later, after much, much more pain) is one of the skills that you learn from failing at your startup, that you do not learn from succeeding.

More from the library:
More on thinking small
Investment increases your risk
Perils of founder fighting
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